IBDS ARE LOSING CUSTOMERS WITHOUT EVEN KNOWING IT
IBD’S ARE LOSING CUSTOMERS WITHOUT EVEN KNOWING IT Winning In-store Begins Online
CONSUMER FACTS 84% 71% 39% 50% Shop online before or during a trip to a store Expect to view in-store inventory online Unlikely to visit a store if stores’ inventory not visible online Expect to buy online and pick up products in-store ► Online and in-store are no longer discrete ► Online and in-store must work in harmony as a seamless experience ► This holistic experience is called Omnichannel
OMNICHANNEL ► Omni is a Latin prefix meaning all, hence all channels as one ► Consumers want to freely move into and across channels without friction throughout their purchase path
OMNICHANNEL PURCHASE PATHS $ Browse Online $ Buy Online Buy In-Store Pick Up In-Store “Click & Collect” – over 50% of REI’s and Wal-Mart’s total online sales $ Buy Online Browse In-Store Ship to Home Buy Online $ While still in-store – up to 10% of national retailer’s sales After leaving store – often leads to buy online/pickup in-store Return In-Store Convenience: not having to ship returns Piece of mind: if problem can talk to local retailer
OMNICHANNEL ► It’s about delighting LOCAL customers ► It’s NOT about selling stuff online to anybody, anywhere CEO INTERVIEWS (click logo to open video in web browsers)
OMNICHANNEL CONSUMER FACTS Spend More (recent data from Wal-Mart) • Shoppers who only buy online spend an average of $200 / year • Shoppers who only buy in-store spend an average of $1, 400 / year • Omnichannel shoppers who buy instore and online spend an average of $2, 500 / year Want Products Quickly • 2 -Day delivery became “normal” with Amazon Prime • Same-day becoming new More Likely to Buy When Referred from Brand Website to Retailer Website • 2 x-3 x higher conversion rate than other paths, i. e. search engines • Brands and Retailers working “normal” – consumer want together create powerful immediate gratification consumer experience
OMNICHANNEL, OMNICHANNEL ► It’s not going away ► Consumers love it and expect it ► IBD’s must embrace it to be relevant PROBLEM: ► Only 15% of IBD’s are Omnichannel
BIG COMPETITORS WINNING OVER CONSUMERS ► Amazon Going Local • Investing in brick-andmortar • Rolling out one-hour delivery • Establishing local pickup locations ► Sporting Goods Chains Leveraging Brick-and-Mortar Stores Online • Investing millions to improve Omnichannel experience • Showing store and supply chain stock status in website • Adding special “Pickup Counters” for faster service • Sales staff with tablets and kiosks show consumers expanded product selection, make special orders easy and fun (Up to 10% of big retailer’s revenue)
IBD AMBER ALERT ► 85% of IBD’s are missing online, consumers aren’t finding them during purchase path ► These IBD’s and the brands counting on them are losing sales and market share ► The time for IBD’s to “think” about this has passed ► IBD’s need to embrace Omnichannel, be a local repair shop (not a bad thing), or retire!
BECOMING OMNICHANNEL ISN’T DIFFICULT ► Use a point of sale system and keep your inventory reasonably accurate ► Have your own store-branded website • Promote your value added services and special events • Display products for all brands and categories you sell, show which are available in-store now for immediate gratification and which are available in 2 -3 days from your supply chain (this can all be automated) ► Most consumers (over 90%) will use your website to pre-shop and come into the store to buy ► Many will buy products at your website and pick them up in your store ► A few will buy products at your website and request they be shipped • You may not want to deal with this but recognize it’s about customer service, not ecommerce • You can ship your inventory, or partner with suppliers that do this on your behalf as a service
BRANDS and SUPPLIERS
BRAND AMBER ALERT ► Specialty brands count on IBD’s ► Only 15% of IBD’s Omnichannel ► Hurting brand’s business ► Brands need to take action!
FOUR OPTIONS FOR BRANDS 1. Stop counting on IBD’s 2. Sell direct and share margin with IBD’s 3. Create brand microsites for IBD’s 4. Insist IBD’s become Omnichannel
1. STOP COUNTING ON IBD’S Change Your Channel Strategy ► Sporting goods chains ► Big box ► Amazon ► Etc. DOWNSIDES OF THESE CHANNELS ARE WELL KNOWN THAT’S WHY YOU CHOSE IBD’S TO BEGIN WITH
2. SELL DIRECT & SHARE MARGIN WITH IBD’S Takes Consumer Focus Away From Local Retailer • • Brand Has Limited product selection (even with P&A distribution) • • • Local retailers are cornerstone of Omnichannel “Their” brand needs to be Omni “Their” unique value needs to be center stage They are in best position to manage customer relationship Consumers want broad selection and empowerment of choice Want to compare brands – that’s why independent retailers exist Without broad product selection, consumers will search elsewhere Every purchase elsewhere opens door for personalized marketing by another competitor Limited selection makes it difficult for IBD’s to attract and keep customers IBD unlikely to sustain profitability with limited online exposure (winning in-store begins online) May work in some markets with small brand franchise stores • Brand must have and hold huge influence with consumers (Apple, Harley Davidson)
3. BRAND MICROSITES FOR IBD’S Brand’s product line preloaded into customizable microsite for each IBD ► Will retailers will be happy with these websites? • Makes sense for a brand franchise store • Bad IBD’s will like them (easy and cheap) • Great IBD’s won’t touch them ► Will brand be happy with these websites? • Brand gains control of retailer’s online presence (aka % of floor space and inventory budget) • Brand successfully secures online network of worst IBD’s ► Most important question, will consumers be happy with these websites? • Same problem as brand direct sales • Consumer’s experience limited by brand’s product selection • Loyalty and lifetime purchases difficult – lifeblood for most retailers • Difficult for IBD to sustain profitability
4. INSIST IBD’S BECOME OMNICHANNEL ► Gives consumers exactly what they want – an Omnichannel experience ► Leverages power of local specialty retailers against online marketplaces and national chains ► Creates long-term, sustainable, strategic advantage for brand its retail partners
Growing Omnichannel Isn’t Difficult Reward Desired Behavior • Explain importance and urgency of Omnichannel to dealers (be a leader!) • Make Omnichannel a requirement for dealers to get best pricing (take a stand!) • Refer consumers from brand website to Omnichannel retailer’s websites (win-win) Consequences for Undesired Behavior • Set date in future when Omnichannel will become a mandatory dealer requirement • Ending relationship with marginal dealers is short-term loss for long-term gain • Creates opportunity for an Omnichannel retailer to sell your brand in that market, or for progressive entrepreneur to open a new store with a good brand partner • NBDA Outspokin: CAN TREK CONNECT WORK FOR US? by Mike Jacoubowsky “Poor retailers should be shown the door rather than coming up with a program that assures some bottom level of customer experience becomes the new standard. ”
WHILE GROWING OMNICHANNEL IBD PARTNERS ► Minimize lost sales ► Have “Buy Now” or “Buy Local Now” button on product pages in brand website ► When Omnichannel retailers exist near consumer, let consumer select retailer and place product in that retailer’s shopping cart ► When no Omnichannel retailer exists near consumer, sell direct and keep full margin (don’t reward undesired behavior)
WORKING TOGETHER WE CAN KICK BUTT In addition to Omnichannel we need better business intelligence • More Timely • More Accurate • More Comprehensive • More Actionable • More Efficient • More Collaborative
SUMMARY Consumers: Retailers: • Now dictate retail requirements • Bike shops not meeting consumers needs • Expect Omnichannel convenience • Only 15% provide Omnichannel convenience • Retailer irrelevant if not meeting their needs
SUMMARY Competitors: • Biggest threat comes from outside the specialty industry • Online marketplaces and national chains are taking market share, shrinking specialty industry pie • Brands continuing to focus on fighting each other over % of floor space and preseason dollars in shrinking IBD pie looks bleak – zero sum gain • Brands working with retailers to focus on consumers and growing the IBD pie looks bright – positive sum gain
SUMMARY Brands / Suppliers: • Need at least one Omnichannel retailer in every market • Be a leader and grow Omnichannel adoption through good communication, rewards and consequences • Consider offering fulfillment as service to help dealers
SUMMARY While Growing Omnichannel • Minimize lost sales • Seamlessly transfer sales to local Omnichannel retailers when they exist • Sell direct when no local Omnichannel retailer exists and keep full margin
SUMMARY BI Business Intelligence • Needs to be better
IBD’S ARE LOSING CUSTOMERS WITHOUT EVEN KNOWING IT Winning In-store Begins Online PANEL DISCUSSION
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