As if the retail industry needed another buzzword to describe merged channel shoppers, Jon Lewis Managing Director Andy Street is offering us one: the "master shopper." That's his term for shoppers who get very creative about how they are mixing e-commerce, mobile and physical retail interactions.
Street, according to an interesting account that ran in The Telegraph, pointed to recent behavior from its shoppers after a policy change. The policy involved what the chain calls click-and-collect — which is typically called "buy-online-pickup-in-store" in the U.S. The chain recently stopped making all such orders free (beyond the price of the item itself, of course) and began charging £2 (about $3.10 U.S.) for any orders costing less than £30 (roughly $46.30 U.S.).
Street said the policy change caused no noticeable drop in the number of people using the service, meaning the charges went directly into the profit line. Said Street: The policy change "performed exactly as planned. Some people are paying the charge because they like the convenience, some are trading up to make bigger orders and some are saying that they won’t make that order now but we have no way of tracking if they make the purchase later on."
That raises a few thoughts. Consider that last part about some shoppers who "won’t make that order now but we have no way of tracking if they make the purchase later on." Street didn't mention how many shoppers that comment referenced, but that certainly sounds like those people are in fact abandoning the service, quite possibly due to the price hike. Without knowing those numbers, it's hard to justify a conclusion that the fee is having no meaningful ill effect.
This speaks to changing the behaviors of shoppers to, candidly, engage in higher-profit activities or, at the very least, higher-revenue ones. When analyzing the results, it's a mistake to not factor in potential behavioral changes in other shoppers and prospective shoppers. In short, had the price hike not been implemented, how many shoppers who had not yet tried the service would have been inclined to try it? To calculate the cost of this new fee, you can't only look at whether it alienates existing click-and-collect shoppers. How many click-and-collect purchases from new potential service customers were lost? How many people who hadn't already shopped at John Lewis might have been lured over had the service not grown a fee?
Shoppers are willing to try new retail methods if they feel that the retailers are working with, not against them. And nothing quite says "we're against you shoppers" as adding a brand-new fee. That's something you do to discourage a behavior.
This kind of move sends a message. This column recently looked at Abercrombie & Fitch and what it needs to do to become a truly mobile-centric chain, as well as a strange retail strategy based on making shoppers jump through lots of hoops to prove that they really care about pricing. These efforts were examples of companies wanting to embrace merged channel strategies, but choosing to cling to the old thinking about discounts and getting people into stores.
Let's put today's retail efforts into a bit of historical retail context. Before about 1995, physical retail was pretty much the only options, other than catalog sales, which were really call center sales. Before '95 is when most of today's retail leaders learned their trade and when many of these strategies were hatched and refined. After '95, online rivals became, as the cliché went, just a click away.
Retailers needed to learn their lesson — and change their thinking — back then. But, alas, that didn't happen — other than at Amazon, eBay and few other early e-commerce giants. Fast forward to today. If you thought that Web commerce gave shoppers more control, let's look at mobile in late 2015. This doesn't merely allow shopping on the street and from a doctor's waiting room. Its barcode scanning capabilities allow highly-efficient sales losses right from within physical stores and mobile payment threatens to deliver highly-specific purchase details to third parties that sell them to direct rivals.
I remember early physical chain efforts to block wireless signals, to prevent sales losses. Talk about your anti-shopper thinking. How about lowering your prices so that those price-comparison bots make you look good? Walmart and Target were among the first to realize that. All they had to do, they discovered, was make the price close enough to not justify the effort of changing stores. Remember that the customer is already in your store and already wants the item you have in stock. If you can't retain that sale, you're not getting any sympathy.
Shoppers are not nearly as stupid as most physical chains seem to assume. If you treat them with respect and assume that they know just as much as you do about pricing and product quality, you'll earn their sales. Try and use mobile and other merged channel elements as a way to control the shopper — or to needlessly boost your margin on them — and you'll drive them right into the arms of virtual chains that are only too eager to treat them right.
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