Consumers and the New Multi-Channel Reality

Event: Kelsey Group Drilling Down on Local Search 2005

Session Title: Consumers and the New Multi-Channel Reality

Session Date: April 19, 2005

Session Time: 8:45 am – 9:30 am

Session Description:
The biggest gains online this past holiday season were recorded by traditional retailers, so-called “brick and mortars” that are more successfully integrating online and offline selling. Given the rise of Internet adoption for local shopping, it’s clear that consumer behaviors are evolving. How are retailers adapting to those new consumer behavior patterns? What trends are they finding — especially in local — and what strategies are they adopting to drive traffic to local stores?

Session Participants:
Eric Chandler, VP, e-Commerce Marketing,
Erin Bayer, CEO/Founder of SeeJaneRunSports
Kendall M. Fargo, Founder & CEO,
Kay Lamming, Owner, Cotton Basics
Carol Yenne, Owner, Small Fry’s

Related Posts: buzzhit!’s Drilling Down on Local Search 2005 Index Page

Session Details[*]:

Q: Have either of you heard of the term SEM

A: Bayer, Lamming: Both “no”

Commentary: SEM not being marketed successfully to small businesses

Q: How has the Internet changed your business

Bayer: Started 5 years ago, always had web site. Three physical stores in Bay Area. Provide running supplies for women. Mission is to provide a community for female atheletes. Understand the needs of their customers/potential customers to learn about their company, offerings, etc. Encourage staff to direct people to sites. Started e-commerce 3 years ago. Over last 4 months, online business has increased 400%. Attributes it to brand recognition; also showing up now in search results due to signing up for Yahoo Product Submit. Strategic pricing of items (including low prices on popular items) seems to be influencing search ranking.

Lamming: Cotton basics around 20 years. 4 physical stores. Don’t have a web site. Have been on StepUps ‘Market Square’ for several months, which is generating some leads. Haven’t done web because they haven’t known what they wanted to do; believe now that they want to drive traffic to the physical stores. Unique challenge, since they manufacturer all of their own clothing items, which aren’t necessarily the things people are searching for online.

Yenne: Small Fry’s aroundd for 20 years. One physical store. Have used CitySearch for quite some time. Got very few sales due to it. Built own web site 5 years ago, focused on specific, nationally known items. This has been the most effective for them. Lots of purchases (e.g., for a baby shower) are last minute, don’t work well online. Lots of high end purchases (e.g., $800 strollers) happening at sites like eBay. Feels that the cost of paying for web site creation is greater than revenues derived from online sales.

Q: How does the local retailer differentiate from national retailers

Fargo: We’re a link between physical store retailers and shopping sites. We see two distinct trends. 1) Lots of last minute shoppers who want to find something locally (e.g., Valentine’s Day). 2) Lots of unique items that people are looking for; would prefer to buy from local store vs. big box competitors (like supporting small biz)

Chandler: Small biz wants 1) Trusted relationship with explaining the benefits of going online. 2) Back-end hand-holding; doing the implementation for them. 3) Simplify product offering; managing 5-10k keywords is much too much… need something that requires less time. 30k PPC advertisers, 2/3rds are small biz.

Q: National advertisers seem to percolate up to the top (of SuperPages); how do we get these small businesses on the first page of results

Chandler: Great question… One fundamental decision we made was to create two separate auctions; top 3 listings are national, next 3 are local (regardless of bid rates).

Q: Went searching for a mountain bike last night. How do you get more small biz to particpate in your program

Fargo: Getting referrals from existing small biz customers. Looking for channel plays (inventory system vendors, etc). Largely though, it’s about SERP results

Q: Retailers, how hands on vs. off have you been in transitioning online

Bayer: Lots of hands on work to maintain Yahoo Shopping. Don’t do anything with Market Square; they do everything.

Lamming: We don’t have a person dedicated to advertising, let alone online. Would love a turnkey online presence that she could tweak, provided it was easy. Would like a bigger presence.

Yenne: Would love to see Google searches that directed you locally instead of everything going to Amazon. So overwhelming. Relates tragic Earthlink experience. Should be as easy as banking; no more than an hour or two a week.

Q: What’s it going to take to satisft that requirement

Fargo: Learning process for everyone. Tech is advancing to the point where much can be automated. Bar code scanning is helping with inventory mgmt (vs. physical audits).

Chandler: I think you need to have a diverse product line; some small businesses are really engaged and want to do much themselves… but most don’t.

Q: SuperPages has thousands of sales reps. Can they make the turnkey case?

Chandler: 100 businesses a day signing up. So the business is there, but you have to have the offering in place. Really need to customize pitch and offering for these guys vs. nationals.

Q: What kind of experiences have you (retailers) had with people selling you online pitches

Yenne: Spent 3 minutes with lady from Market Square (all the time I had). Came by next day, took pictures. That was it. Main callers are folks that want to design their page. Lots of calls from those wanting to sell advertising; “until someone comes to me and says that anyone in san francisco looking for a baby levi jacket will be directed to you, I have no real interest”.

Bayer: Get many calls, don’t listen to any. Too busy for cold calling. Market Square came by in person. First time didn’t give her the time of day. Second time was more receptive. Pitch that worked is “we’re not selling you anything, we’ll try it and see what happens”. Didn’t have to do anything. No online advertising; would consider pay for placement. Have email lists for customers who want promotions.

Lamming: Get calls all the time. Hang up on them; too busy with customers. Would read something that came snail mail; don’t open unsolicited emails.

Audience Q: As you get better with inventory, do you see handling fullfillment

Fargo: Have a service that allows shoppers to reserve a product, but no, don’t really see going there unless there’s demand from the retailers.

Audience Q: Say your day is busy, but don’t have time. Would you allocate 10 minutes a day to talk to sales people

Bayer: Can’t imagine that. Does her own searches. If she sees something that appeals and is easy, she might sign up.

Q: Do you take calls from Chronicle, Yellow Pages?

Bayer: Do do newspaper, no print. Mostly direct mail. That and good press (word of mouth); also have a training team (running) out in the community

Yenne: Bring us the business; knows that someone holding Wave magazine in the store saw the had; proved it worked. Advertising online just hasn’t worked. Prove it.

Bayer: Would pay a percentage of sale from an ad; would rather do that than pay an overhead fee.

Lamming: Don’t think that print media works well for small businesses. Direct mail database gets results. Don’t want to be one of 10MM listings online; we get lost in there.

Chandler: Chicken and egg problem. Lots of small businesses don’t see the opportunity. CPC gets you part of the way to CPA; risk is shared between the publisher and small business.

Q: Does that address the issue of the small biz being lost in 10MM results

Chandler: It depends on whether you’re looking for everything on general search engines, or if people will be using vertical SEs that screen out a lot of that junk.

Audience Q: For merchants… What role does the phone play in your sales operation. Is Pay Per Call of interest

Lamming: Maybe… haven’t thought about that.

Yenne: Think the royalty idea is a good one. Happy to share profits with someone driving business. Really want to see local stores integrated into core search (called out)

Audience Q: Merchants… do you interact with your suppliers or find suppliers online?

Bayer: Find products at tradeshows.

Yenne: Have found stuff online that isn’t available at a tradeshow. Sometimes takes 3 weeks before getting a response. Robbiez; will give a local retailer a piece of the action if their product is bought online (and could have been bought offline). Likes the model, because it avoids channel conflict

Polachek observation: Always thought local product retailers would be the first to move online. Yesterday, we saw a bunch of service providers who were deep into online advertising. Today, seeing retailers who don’t want much to do with online advertising.

* These are raw, unproofed notes taken in real-time. Nothing attributed to any speaker should be assumed to be an exact quote. Rather, my goal was to capture and communicate the essence of what was said. If there is a significant mistake, please post a comment or email me; I will make a correction at my earliest opportunity.

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