I love the online world … My kids joke that my PC is hot-wired into my veins. There’s loads of places where the online world is revolutionising retail, but there is one situation where online struggles to compete with offline retail. Where? When there are problems with a product.
Over the past few months I have indulged in some online retail therapy. I picked up some clothes from the US (as most Australian stores don’t stock clothes for tall women). I religiously checked the measurements, but when they arrived they were 2 sizes too large. Unless the US has different tape measures than Australia does, this was a bit of a worry. So I had to return them for a refund. Cost of clothes $120 – cost to return them via post $75 = One lost customer.
I also picked up some smoke alarms online in Australia. One was faulty and had an annoying habit of going on a beeping rampage every few weeks (with no smoke or fire around). Usually replacing the battery every fortnight quietened the racket, but last week nothing worked. The problem was the alarm was about $85 to buy online plus postage. Then I had to pay for the electrician to install it (it was hardwired in). To return it would mean getting the electrician back out to remove it and seal the wires. Posting it off. Then paying for the electrician to come back and install the replacement. It wasn’t worth the hassle, so I threw the faulty one away and went to Bunnings.
Online sales of products are fine when things go well, but they can’t compete with local bricks and mortar businesses in fixing problems when things go wrong.
Smart businesses who are competing with online retailers should pay heed. One of the greatest sales strategies is fear. Combine fear with guilt or regret, and you are more likely to get action. Martin Lindstrom in his book “Brandwashed”, highlights that studies have shown that women are more prone to fear and guilt than men are. Remember, more online purchases are made by women than by men.
If you are a bricks and mortar business, competing with online retailers, then perhaps one of the strategies you could choose to adopt is the fear of what happens if there is a problem if you bought the product online. How will you deal with the hassle, inconvenience and cost of fixing it.
“Safer than buying online” could be one strategy you adopt – particularly if you add in the increasing hacking of major company websites and leaking of credit card information (Stratfor is just the latest example of a hack causing major problems for online purchasers).
I have started seeing some smart travel agents adopting this strategy. The line they are taking is, “Sure you may get cheaper flights online, but what happens if there are airline strikes, flight cancellations or natural disasters – booking through a travel agent makes getting you out in those situations much easier, faster and safer”. A very convincing argument.
And if you are an online retailer, you need to be conscious of these fears. Make sure you encrypt all payments and data in your system (and tell your clients about it). Publicise your easy return policy – pay for postage of returns and refunds. Unless you take direct action, bricks and mortar retailers will begin to regain ground.
Where else do you see that traditional retailers have it all over the online retailers?