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Shopping on the Net, and off

By Rutger-Jan van Spaandonk

FutureCompany, Financial Mail’s new economy segment, published the results of the second annual on-line responsiveness survey in last week’s issue. The top 100 companies on the JSE Securities Exchange were rated according to the accessibility and usability of their websites and the way in which they respond to queries.

It was found that 34% of companies still had not replied to e-mail inquiries even after four weeks! Despite massive investments in web and e-mail technology, many top SA companies still do not have proper strategies in place to capitalise on these investments, effectively shunting the Internet as a medium into the market.

Last year’s spectacular dotcom collapses probably have a lot to do with this. Observers found that e-tailers for example were not able to generate many sales ON their websites (and in the process of discovering this, went belly up), and therefore concluded that on-line shopping was a stillborn infant, suggesting that many companies abandon their on-line efforts.

But such a conclusion is a rejection of RJ’s immutable first law of retailing which says that “shopping = browsing + buying”.

No retailer would regard a customer that comes into the store, and asks about the products on sale, but then leaves again because she “still has to think about it a little more”, as a lost call. The retailer would see it as a “need” identified and a “want” created; the only thing to do is to wait until the customer concludes the transaction; or better still, to push the customer to make the buying decision there and then or shortly afterwards.

This example shows that browsing is as a much an integral part of the shopping experience as the transaction itself. And that notion should be taken as the starting point for devising Internet strategies.

Experience shows that interactive websites do lead to sales. 40% of car buyers in the US do extensive research on the Net before making a buying decision. They check prices, compare specifications of various manufacturers and models, and seek out peer evaluations of dealerships. By the time they walk into the showroom, they know what they want, and are only there to conclude the deal. Some call this a ‘clicks-and-mortar’ business model.

There are benefits to both consumers and companies in this model.

Consumers can learn about the product in advance, and much more than they could in the store. Typically, the website is more informed about the product than your average Saturday morning part-time (student) shop assistant. Also, it is much easier to admit to yourself that a product is out of your league, than having to do that to this youngster. Browsing thus becomes more enjoyable, and a private affair. The shopping experience overall is enhanced because you now only have to go into the store to pick up the product you have identified online; or you will have at least narrowed the choice to only a few products.

Companies can also expect to see huge benefits. Manufactures can maintain the same identity across a number of resale channels, and thus control the brand experience via their website. Company and product information throughout the chain can be effected immediately at little cost. And, most importantly, happy customers tend to come back, time and again.

All in all, not having a “clicks-and-mortar” strategy that is based on the “shopping = browsing + buying” paradigm will ultimately lead to a decline in sales and market share because your competitor most likely did evolve in this direction.

May this be a call to arms for all companies that did not fare well in FutureCompany’s survey.

Rutger-Jan van Spaandonk is a director of FutureForesight Group. He
was a founding member of the MMG/marchFIRST Office in Johannesburg. He can be reached on mailto:rutger-jan.vanspaandonk@futureforesight.com

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The Big Change is a business strategy blog and newsletter published by Arthur Goldstuck, managing director of World Wide Worx, a leading technology research organisation based in Johannesburg, South Africa.

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