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Stores learn to integrate online sales efforts with physical sites

The shoppers asked the store clerks some simple questions.

"I bought this from you online, but it doesn't fit. Why I can't return it here and get the right size?"

"How come the discount coupons you Twittered me are no good online?"

"You sell this cheaper online. So can I get it for the same price here in the store?"

Good Lord," muttered the frustrated sales clerk who agreed, only to find that the cash register repeatedly refused to accept the lower price.

The video footage is the handiwork of Paco Underhill, a shopping behavior expert and author of the book Why We Buy. He is using it to show retailers just how much influence the Web has on their business, well beyond being the source of 7 percent of sales. And how most stores misunderstand how it's changed their industry.

His surveys show more than 70 percent of all shoppers now pre-shop and do price comparisons on the Internet before and, thanks to smart phones, right from the aisles during shopping trips. If they cannot get the same or a better deal in the store than they could online, 43 percent of them will leave and buy somewhere else.

Over the years, Underhill's hidden camera videos helped retail executives see the need for lower shelves and wider aisles in their jam-packed stores. That was after he filmed elderly customers giving up after gamely trying to reach products on shelves too high to grab or abandoning a product search after experiencing what he called "the butt brush" from a passing customer who walked past too close in cramped quarters.

Retailers are starting to grasp that Underhill's latest effort highlights a problem that is costing them big business. His footage show clerks making up answers or trying to game their own store's system when confronted with customers who insist on the same policies and prices whether they are in a store, online or dialing up a call center. One clerk promised to get a manager's approval, then disappeared into the human resources office. Most, however, just shrug their shoulders and sympathize with the customer.

"It is amazing retailers leave their front-line troops so untrained and unequipped that they risk their customer satisfaction ratings dropping dramatically," Underhill said. "For brick and mortar stores, selling in multiple channels should be a competitive advantage over dot-coms like Amazon that don't have stores. The customer considers it all one brand and expects it all to be seamless."

An American Express analysis found that just 1 percent of its cardholders shop only online, while 82 percent use a combination of stores and Web sites to gather product information and buy, often from the same retailer.

And they are typically more valuable customers.

"People who shop both your store and Web site spend 25 percent more with you," said Ed Jay, American Express senior vice president of retail industry relations, who advocates that retailers treat their Web presence as their most important marketing and information tool rather than just a way to lead customers to the checkout pages.

"Our research shows it's the most frustrating part of shopping today," said Julie Puleri, global retail practice leader for IBM. "Customers think — and today have the power — to be treated the same in any channel."

And 61 perent of them say they will shop more with stores that do.

In industry lingo, making shopping policies and prices the same is called "channel agnostic." About the only big brick and mortar retailers that can make the claim now are JCPenney, Sears and Apple Stores. But so many more are now making this form of convergence a top priority that IBM is hiring staff to aid an unraveling process that promises to take a few years.

"It's a lot harder than it sounds, because retailers are organized in separate silos dating back to the mainframe days," said David Sellinger, a consultant with RichRelevance who previously was an executive with Overstock.com and Amazon.com.

Most retailers made their online units a separate business unit; some made it a separate company. Internally, the stores, online and social media organizations constantly fight each other for a piece of the marketing, logistics and information technology budgets. Warehousing to keep stores supplied is much different from packing goods for shipping.

"It was a real struggle," said Michael Copeland, vice president of operations for HSN has continued investing to expand its reach into live video apps for smart phones and wireless Internet service now available on airlines.

"We have to get beyond being only a TV shopping channel that relies on the old idea of the customer coming to you," said Mindy Grossman, chief executive of HSN. "Today you have to come to them and on their terms."

One reason many chains are a work in progress is resistance from store staffers who see the Web as a threat to their jobs.

"The competition between the Web and the stores is absolute," said Kimberly Grabel, senior vice president of marketing at Saks Fifth Avenue, which is breaking barriers by using its Web site to dispense fashion tips and promote designer appearances at stores.

To ease the transition, Saks' commissioned sales force in stores now can also earn a cut of sales they help place at saks.com. At Brooks Brothers, staffers are trained to understand that Web customers are four times as likely to visit a Brooks store than a casual browser. So responding to their e-mail queries and familiarizing them with Web site features for replacing dress shirts with a few mouse clicks means the same customer is more likely to visit a store for big-ticket suit purchases.

"The Web has become our primary marketing vehicle to get people to the store," said Brian Dean, vice president of Brooks Brothers Direct. "The more loyal customers we embrace there, the more likely we'll see them in a store on the weekend."

Mark Albright can be reached at albright@sptimes.com or (727) 893-8252.

Stores learn to integrate online sales efforts with physical sites 01/16/10 [Last modified: Monday, January 18, 2010 6:09pm]
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