Buy Online, Pick Up In Store Leads To Higher Average Cart Values

Below is an older article (from the Puget Sound Business Journal) back from 2003 that I just ran across. It's interesting to note the effect of a consumers total purchase that the physical store had. Many people have stated that web - to - store pickup is nothing more than moving the cash register / POS into a person's home. I would argue that it is a lot more, and this simple case study proves it. It not only saves time for both the retailer and customer, but leads to a better experience and to higher average shopping basket values....

"Recreational Equipment Inc., the Kent-based outdoor gear cooperative, introduced an in-store pickup option in July. Within two months, about one-quarter of all online orders at REI.com and REI-outlet.com were being picked up in REI's 67 stores, the company said. For REI-outlet, nearly 40 percent of orders are being picked up in stores.

"We thought it would be successful, but we were surprised at how quickly it was successful and adopted," said Joan Broughton, REI's vice president of multichannel programs. "By the end of the first day, 60 stores had become involved in this."

It seems logical that bargain-hunters shopping REI-outlet.com would want to skip the shipping charges and pick up their goods at a store, Broughton said. Even better for the retailer, since there is no physical REI outlet store, it brings those shoppers to full-line REI stores, where they can peruse the company's full-price goods.

REI's data showed that 36 percent of online customers who chose in-store pickup ended up buying additional items when they came to claim their purchase. Those customers spent an average of about $90 apiece on additional gear."

To read the rest of the article, click here.

How To Assess The Market Opportunity In Online Influence On Offline Spending

OK. I am still pondering that new Jupiter research report that talks about the influnce of online research on in store sales. This report stated that there was $100 billion in eCommerce sales in 2006. If you apply the generic rule that the typical comparison shopping engine (CSE) gets a lead/commission fee of about 2% (of each dollar spend in revenue) for all the high-value traffic that they send to online retailers, this equates out to about $2 billion in revenue. So all the CSEs and affiliates out there collectively share in this $2 billion pie. This is a crowded and highly competitive market. A market that is predicted by the same report to become stagnant and flat in the not so distant future.

So rather than chasing the eCommerce marketplace, why not target the off-line sales that are directly influenced by online research? Seems pretty obvious to me. Less players. Bigger market. A market that is growing (vs becoming flat like eComm). If you applied the same math as above to the in-store spending that is influenced by online research, this market is about $200 billion by year 2011 (the overall pie is about $1 trillion in 2011).

So why doesn't the same model of lead generation and traffic hold true for web - to - store purchases? Tracking, tracking and tracking. There is just not the level of reporting and tracking of these leads.

My mission is to prove that the same referral model that happens online should and does absolulty hold true for web to store sales.

Measuring The Degree Of Influence Newspaper Ad Inserts Have

In a research study that was release in late 2006 by Vertis Communications (Customer Focus®/RISC) it revealed that 51 percent of adults use advertising inserts or circulars to decide where to shop for clothing items. The study analyzed the shopping habits of four core segments (below) identified through RISCAmeriscan and the motivating factors influencing how and where these groups shop for their fashion items.

1. “Movers and Shapers”
2. “Daredevils”
3. “Guardians”
4. “Wannabes”

“The four groups analyzed through the study show that, despite demographic similarities, consumers are unique individuals with different values and personalities influencing their habits,” said Jim Litwin, vice president of market insights at Vertis Communications. “In order to connect with consumers on a personal level, it is important for marketers to understand these groups and their motivations; this will help them develop relevant and effective advertising and marketing collateral.”

Consumers who are part of the “Movers and Shapers” category are often described as open-minded individuals in constant pursuit of new things from clothing to careers. They are a high-energy group that does not like to be controlled or limited, but seeks the acceptance and companionship of others.

“Daredevils” are known for their competitive nature and constant need for recognition from others. Often times they accomplish this by being risk-takers or though unorthodox behavior. These individuals value status, which is often reflected by their physical appearance and purchase selections. Adults in the

“Wannabes” often aspire to be like other groups who have what they want and know how to enjoy life. These adults use their energy and activity to achieve the entertainment they seek and are often attracted to unique and different experiences. This group has a difficult time connecting with others.

Of all the groups, “Guardians” are least likely to accept change and often plan ahead to avoid unexpected situations. Close, personal relationships are important to this group, which values tradition and routine. They are least likely to become leaders, but will always follow others.

This same study, which surveyed respondents for the first time via the telephone and Web, also revealed the following:

Shopping Behaviors of Adults

• 58 percent of Daredevils and 50 percent of Guardians research by circular and then purchase at store
• In comparison, 21 percent of Movers and Shapers research by circular online and then purchase at store
• According to the study, 13 percent of Daredevils research by circular online and then purchase online, compared to 10 percent of Wannabes and movers and shapers
• 8 percent of Guardians and 8 percent of Wannabes research by circular and then purchase online

Discount Stores Are Shopping Preference for Movers and Shapers

• 40 percent of Movers and Shapers surveyed shop at discount stores most often for their fashion items, compared to 18 percent of Wannabes
• Although 16 percent of Movers and Shapers shop at department stores, this group is most likely to shop at stores where they can get the best value for their money
• Movers and Shapers are busy individuals and 18 percent are attracted to stores where they can get items for the entire family
• 37 percent of consumers in this group have a combined household income of less than $30,000

Wannabes Seek Specialty Stores for their Unique Shopping Needs

• 21 percent of Wannabes shop at specialty stores for their fashion items, compared to 1 percent who shop using catalogs
• When selecting where to shop, 38 percent of Wannabes look for stores with clothes that fit them, compared to 11 percent who shop at locations carrying the latest fashion
• 50 percent of Wannabes have a combined household income of $50,000
• Of the women 23-54 surveyed, 44 percent are classified as Wannabes

Daredevils Frequently Visit Value Retailers For Fashion Needs

• According to the study, 33 percent of Daredevils shop at value retailers for fashion items
  
• For 32 percent of adults classified as Daredevils, “best value” is the most important factor in selecting where to shop, while 29 percent shop at stores with clothes that fit them
• Daredevils are least interested in stores carrying the latest trends, with only 6 percent of respondents stating this is important when selecting where to shop
• 38 percent of Daredevils have a combined household income of $50,000, while 34 percent have an income of less than $30,000
• 30 percent of women 50 and older are categorized as Daredevils, compared to 8 percent of women 18-34

Guardians Find Fashion Needs at Department Stores

• 27 percent of Guardians shop at department stores for their fashion needs
• Out of the four groups studied, Guardians are most likely to shop using catalogs, with 9 percent of respondents using this shopping tool
• For 33 percent of Guardians, best value is a motivating factor when selecting where to shop for fashion
• 37 percent of women 50 and older and 20 percent of women 65 and older are classified as Guardians

New Technologies That Are Helping Take Printed Ads Online To Drive W2S Shopping

The NAA's publication called PressTime has written a rather interesting article about digital newsprint technologies that are allowing user to receive a digital version of the newspaper and then take this eCopy with them wherever they are and consume this content across a whole host of digital devices. My take on all of these new advancements is that these emergent technologies will all come to play some role in a consumers buying process of first going online research a product before heading into a physical store to make a purchase.

Advertisers need to take note and embrace these technologies as soon as possible, even if they just "test" them out. It is important to get a understand of each and determine how to best leverage them to meet their business goals. The only way to do so is to get your hands dirty and just try things out. I am not talking major ad spends, but small defined tests to learn about the technologies and to gain expertise and position yourself as a thought leader, so that when these technologies do reach the mainstream, your firm has a head start on the rest of the competition. To read the entire article, click here.

For this blog post, I would like to focus in on one of of these technologies that I find especially interesting. Introducing the Times Reader, available in a free beta on NYTimes.com. The Times Reader is a downloadable application that enhances the onscreen reading experience of The New York Times for Microsoft Windows XP and Windows Vista users. It offers consumers access to The Times electronically, online or offline from a desktop, laptop, tablet PC or ultra-mobile computing device. Times Reader lets users retrieve the latest news and photos, through a synching process that lasts approximately one minute.

This new reader technology combines the interactivity and immediacy of the Web with the portability of a newspaper through Windows Presentation Foundation (which is Microsoft's advanced display technology that is avaialble only in Windows Vista). The text in Times Reader is displayed in a format to fit the size and layout of any computer screen and enables readers to customize the display according to personal preferences.

The NYTimes.com is the first to offer advertisers and readers this unique and advanced capability to date. It really gives the users of this technology and content the ability to experience the phyically printed paper in a new electronic way and provides advertisers greater visibility for their ads through this unique platform.

For advertisers, the application provides another creative platform to reach readers. Advertisements can be as small as a button or expand into multi-columns. In the beta version of Times Reader, only one advertisement appears on each page, giving significant visibility to that ad space. Future iterations of Times Reader may accommodate more advertisements on a single page. Furthermore, once downloaded, the content on the userseIU PC allows readers to click through advertisements to a designated landing page from that advertiser, even when not connected to the Web.

Anyone who is currently running Windows XP and is a registered user of NYTimes.com can participate in the Times Reader beta by signing up on http://www.nytimes.com/timesreader. Times Reader is free during the beta period. It will officially launch in 2007.

To learn more about this cool new online service/product, click here.

Influnce Of Online Research On In Store Sales Will Approach 1 Trillion USD By 2011

In some rather shocking research that was recently released by JupiterResearch last month (Jan, 07), showed what a large role the retail web will play in influencing offline sales. This ever emerging sales channel is and will continue to be the major force to be reckoned with.

This report stated that the Internet will influence 47% total retail sales in 2011, compared to just 28% in 2005. This projection combines total sales transacted online with those carried out off line but directly influenced by online research. These offline sales will grow at a faster rate than online sales over the next five years.

The real conclusion that needs to be drawn from this is that retailers must embrace and become multichannel and to do so they must integrate their offerings so as to have clear, simple and convenient links to offline channels. Driving this growth are the 85% of online shoppers who said they used the Internet to research their offline purchases in 2005.

Also rather counter to the the market "noise" that continues to hype the continued growth rate of online sales, this report concluded that U.S. online sales are expected to plateau at 10 percent to 15 percent of the total amount of dollars consumers spend with retailers.

The impact of online behavior on offline sales will grow at a compound annual growth rate (CAGR) of 12% over the next five or so years. This should lead retailers to realize that the retailer centric web holds a tremendous advertising and marketing value in helping to persuade shoppers to head to brick-and-mortar location.