You’ve been there. The purely emotional moment when, out of the blue, you decide that you want something. And you want it now. It doesn’t matter what it costs, or that the store is across town. It is the song that you just heard, or the scotch you just sipped, or that new video game that your child wants that came out today. (OK, you can admit it: you’re the one who wants the video game.)
And you’ve also had the more intellectual points of no return. After spending two weeks shopping for cars, this Saturday morning you wake up and say, “Today is the day!” You’ve talked about painting the family room since last fall and, hey, the picnic tomorrow was cancelled, so why don’t we do that painting instead? Or perhaps the tax return finally came today, so you can get that PowerBook you’ve been thinking about for months?
All of the above scenarios present very real obstacles for eCommerce companies to overcome. The reality is that commerce is rarely so linear as a person having a basic need and making a purchase to fill that need. Indeed, purchases deeply relate to our intellectual and emotional selves, a complicated tapestry of individual context, emotional centering, physiology and more. And while thoroughly deconstructing that dynamic is beyond the bounds of this article, needless to say, the factors that culminate in people wanting something now – essentially demanding instant gratification – are important to eCommerce providers who hope to create a differentiated business model. Our success is largely about changing – or capitalizing on – behavior.
Move the center of gravity
One of the most basic tactics to bring people to a store is to stock the shelves with products they want, preferably that they cannot get anywhere else. The success of a business based on that model lies in the existing knowledge of (and equity in) high-profile products that people are aware of and will certainly buy, almost regardless of price and particulars. Those products can begin to change the paradigm.
An excellent example is the athletic apparel industry, most specifically Nike. Ever since Michael Jordan’s magic on the basketball court and the accompanying trends that Nike took full advantage of, this has been an extremely big-money and high-profile consumer industry. On a fairly regular basis, Nike offers new, “must-have” products to their customers – many of whom in this context are younger males in the 12-to-25 age range. Their latest new product launch happened last year with the arrival of 18-year-old wunderkind LeBron James to the world of professional basketball. The debut of his apparel collection was a much-ballyhooed event, replete with lines of eager purchasers waiting outside of stores for the first chance to purchase and major national media coverage of the purchase phenomenon. What a perfect opportunity! Now imagine: What if Nike only offered that LeBron James collection as an Internet-exclusive purchase?
All right, I already see your eyebrow raising and the logical objections beginning to form: What incentive would Nike have to do that? Aren’t there issues of sizing/product fit related to an Internet purchase? Aren’t there distribution issues about getting the product to the purchasers, especially in a timely manner consistent with the actual debut date of the products? And these are only some of the very sound and thoughtful objections to this strategy.
But that is outdated thinking. We cannot look at this as a linear narrative that progresses logically and systematically forward. We are talking about changing the center of gravity, changing the paradigm from an antiquated and outmoded physical purchasing model into a new commerce. The rules and assumptions aren’t necessarily the same.
Global trends in brand and commerce
Brand consolidation and globalization is a reality that will only continue to accelerate in the years ahead. More and more, we will see a move away from the traditional model of physical stores that feature a particular category of products – such as athletic apparel – and operate as the distribution point for many brands and manufacturers. Instead, as “super brands” continue to whittle down their viable competitors, they will control an increasing percentage of the distribution channel. This will be particularly pronounced in the case of companies like Nike, which offers a product that demands a premium for both style and performance. Support of the brand and product will become a question of experience design and customer engagement, not pricing strategies or advertising to differentiate from another company’s product sitting right next to it on the shelf. Similar to other super brands – and Disney is a great example – companies like Nike will have captive physical environments that serve more to build brand and create experience for people than to just sell product in the moment.
Returning to your objections, Nike’s incentive to offer major products in an “Internet only” capacity is to stay ahead of business changes and trends, capitalizing on their current progressive brand position before their competition is even framing the question in these terms. While there are issues surrounding product fitness as well as distribution and infrastructure, Nike would have plenty of capital to address those gaps by eliminating “middle men” along the sales and distribution chain. After all, people are interested in Nike, not Foot Locker. I am not familiar with the journey that Nike’s products take from the point they leave assembly to the moment they reach the customer, but it is a fair assumption that there are about two degrees of separation in between, and each stop in between is taking a healthy cut. By eliminating one or multiple external stops along that chain, Nike will have additional operating capital to invest in closing the logistical and infrastructure gaps that might currently make this idea seem farfetched.
Bring the horse to water
Given the strength of Nike’s brand, people were predisposed to buy the LeBron James products regardless of where they had to make the purchase. Even more, given the youthful target demographics of the typical owner of this product, issues surrounding discomfort with the Internet and technology are less of issues. The bottom line is that a substantial group of people wanted this product, wanted it on the first day, and would pay a premium and inconvenience their lives to do so. Quite the position of power for Nike! And what better way to begin acclimating people to being comfortable with and even preferring the Internet for purchasing? Even if we assume Nike takes a loss the first time or three of going through this process, once the infrastructure is built, it will represent both increased profitability and deeper immersion of people into the actual brand.
An experience – not a purchase
Did you know that children used to buy a stick of gum that also happened to have sports cards in the pack? And that today, manufacturers would not dream of putting gum in with a pack of cards because the gum can “damage” the cards, because they are now collected for monetary gain? The biggest component to changing behavior is to re-define what it is that people are paying for. Starbucks has done this effectively, taking one of the most commodified products in Western culture and turning it into a premium. Even though people were accustomed to paying 50 cents for bottomless coffee in the past, Starbucks was able to convince people that paying $3.50 for a single “tall” coffee is not only all right, but also desirable. They changed the product category by building a brand and an experience, and people are only too willing to pay for it.
Nike already has a powerful brand, but how can they newly approach the Nike experience in a way that would change the product category? The reason that young men line up to buy a new pair of sneakers when they first become available has to do with the experience, the intangible benefits to their ego, psyche, external perception and image. In the case of the LeBron James product line, at least part of the attraction is the athlete himself. People want to make a connection between themselves and LeBron. And while Nike is a part of the picture, LeBron is the unique and different part. Nike is selling LeBron. That sale does not need to be limited to the clothing.
One of the real advantages of the Internet and eCommerce is the ease and ability to communicate with customers. Through both email and interactions with the web experience, communication touches are easy. In a traditional brick-and-mortar store sense, the only direct interactions that companies had with people were limited to when they chose to come into the store. And, certainly, that is often not convenient or easy. People typically go into a store to make a purchase or research a purchase. It takes time and a proactive decision to do. And it is on that basis that what people are purchasing is framed. We still think of buying LeBron James athletic apparel as being limited to the apparel itself. However, we can re-define what is being purchased. Imagine if everyone who pre-ordered new LeBron James sneakers on the Internet also received or had access to these types of extras:
* Short, periodic emails from LeBron talking about his preparation for professional basketball
* Entry into a contest to be flown to Cleveland (where LeBron plays basketball) and have front row seats on opening night of his first game
* Access to a protected online multimedia experience of LeBron’s process of working with shoe designers, touring Nike’s facilities and otherwise being engaged in the process of helping Nike to produce his signature products (could also be a DVD that is shipped to each purchaser)
* Limited series of trading cards exclusive to the pre-orders of the sneakers
* Some sort of special, visible “smile” on the product (specially colored laces?) that delineate it as being a first-purchase Internet product
And these are just a small sample. But the point is that it would be painfully easy to build so many different facets into the experience. In so doing, they are deepening the Nike brand while making the very most of the LeBron brand. Even though this could theoretically happen in a traditional context as well – pre-order with the distributor, give them your information, they pass it on to Nike – it is more difficult from an infrastructure perspective. And besides, traditional stores aren’t thinking that way nor are they incentivized to do so. That level of experience needs to happen at the manufacturer level, and the volume of interactions that I am proposing above – a volume that truly can change behavior and make people look at what it is they are purchasing in an entirely different way – is optimized for a virtual business model.
Getting back to the issue of immediate gratification, it is the most immediate possible. The moment an interested purchaser first hears of a new, upcoming line of LeBron James apparel, they could go straight to the Nike website and make a pre-order. Then, immediately, they are taken to the video of LeBron working with designers, or sent an email from LeBron, or some other bit of immediate gratification that completely re-defines what is being purchased and is uniquely digital in its ability to gratify.
The impulse of the moment
Returning to the scenarios at the very beginning of this article, the above Nike concept does not speak to most of those situations. Sure, in cases of information or digital media, eCommerce can be even more immediate than a traditional store. We can go from initial idea to having a digital music track of our choosing in less than one minute. That is extremely immediate and powerful.
But what about the fellow who was thinking about painting his family room and then suddenly decided to move forward with it out-of-the-blue? How can those impulses be addressed?
One very simple solution is to move shopping and purchasing to the Internet and keep pickup in the physical realm. This is a model already in use in some cases. The brand and company would need to be pretty strong for the eCompany to be able to afford the local infrastructure to make it happen. If the brand were strong enough, they could perhaps get a major distributor like Home Depot to be the distribution point with only the smallest of markups – the tradeoff being that Home Depot would be getting a fair number of captive potential customers. But this is traditional thinking and hardly an ilk to affect behavior and make meaningful change. Even on its own, it may only barely work.
Another tactic is to again re-define what it is that people are buying. How can we get the purchaser to spend their money on the paint and supplies at the point of idea as opposed to the point of action? Again, the simple answer is to innovate.
Put yourself in the shoes of the people who want to paint a room. What are their needs and desires? In order to meet those needs and desires – to have a positive end state – what things in between need to go right or be taken care of?
A very radical approach would be to create an online application that is a turnkey assistant to helping someone successfully complete their task, in this case painting. More than just information, it could be an interactive app that considers the problem and process holistically – just as a professional painter would – and provides the precisely correct information and tools for the individual situation. This should come with a charge – $10 perhaps? – that can be fully applied to the actual purchase of equipment and supplies. It would be a true assistant, asking the precisely right questions at the right time of the process and providing detailed answers: making recommendations regarding paint type and color, matching the most appropriate supplies, providing the correct direction for priming and preparation. In fact, if done correctly – if it is more of an interaction and experience than just information – we can completely change how people approach the idea of painting. Once they first start thinking about it in the fall, if they engage with our company and application, suddenly we are then fully engaged with them. Instead of a chore that they need to do at some point, perhaps not for a long time, we provide the inspiration with the information and pull them toward getting the project done. And toward additional projects.
The granular details of making this a success are only limited by our creativity. Things such as mailing paint chips for people to look at and tape to their wall. This can even be done proactively to make people feel good – I know that I would enjoy coming home to a surprise postcard with a flood coat of color on one side and a message on the other side saying “Hi Dirk, Here is our newest color – we thought you might be interested in it for your family room given some of the other colors you are considering.” Or perhaps a free and unexpected small package with a card and product that says “Hi Dirk, We know that you need to remove that pesky wallpaper if you are going to paint, so here is some great stuff to help you take it down – on us,” with the product right there in the package.
Suddenly, the process of painting is an experience, an interaction, something that is personal and in which my unique needs and desires are being spoken to. Instead of it being a passive experience that I might dread or otherwise put off, it is fun and rewarding. I am being encouraged and incentivized to move forward. It completely changes the nature of the activity and moves my gratification point far forward to a much earlier place, one that again is the unique realm of the digital.
Granted, there are some scenarios, products and situations that eCommerce providers realistically will not be able to match traditional stores on. But in many cases, by re-framing the problem and innovating solutions that are thoughtfully engineered for the needs and desires of our customers, we can not only make our personal eBusinesses prosperous, but completely re-define categories and change what people are buying, and how. And it does represent progress, the continued and progressive evolution toward a commerce model that is focused around what will enhance our personal satisfaction and level of happiness, the selling and realization of good experience instead of glossy image or inappropriate product.
What an exciting thought!