Shopping Is What Consumers Do… Not What Analysts Want

A lot of pundits get a lot of mileage (not to mention, verbiage) pitting online retail against in-store retail. And the holiday season, with its stacks of sales stats, brings an absolute feeding frenzy of fortune telling.

Trouble is that it’s inane and pointless to draw lines.

People live in both worlds. And, consequently, they’re buying in both worlds. Why? Because they’re buying where it feels right to buy. Where they get the experience that feels best to them.

Sure bad weather can move the needle on a given day. So can good promotions, interest-free offers and last-minute sales. But, make no mistake, the lines between online and in-store are getting blurred. And the brands that are smartest about it know that price alone isn’t going to make it.

If you look at an online brand like Amazon, from a brand perspective, it’s not just about price, it’s about value delivered to customers. And that touches everything from the confidence consumers have in the information and recommendations they get, the experience that packages will always arrive on time (in fact, usually early), as well as widespread consumer belief and attraction that Amazon transformed the way people shop and is thus always a step ahead of the pack.

Now, that’s a brand experience. And Amazon has grounded their business in the physical world with their partnerships with messenger firms and now the USPS, as well as with more and more in-store pickup centers and pop-up stores that let customers get their hands on a Kindle to aid the decision-making process.

When it comes to in-store retail, the company that’s catching my eye is Best Buy, under the leadership of their French CEO, Hubert Joly.

Joly didn’t grow up in the electronics industry, with its quick rate of obsolescence and constant price slashing. He hails from the travel industry, where he was previously the CEO of Carlson, which owns Radisson Hotels and the TGI Fridays restaurants. Businesses that truly live or die on the customer experience.

And so he’s taken Best Buy back to basics — making people feel their decision is important, that they deserve attention, solutions, satisfaction.

What Joly had to reverse was people coming to the stores just to see and touch goods before shopping online. The battle as he saw it was not for traffic but conversion. With his “hospitality” background he understood that, of on top of the seeing-touching-trying experience inherent to being in a store, he could add some great customer service — information, comparisons, customized solutions and deliver and install before any online purchase could arrive, that would be a real point of difference.

And it is. Best Buy’s stock price is up 200% this year and they are in the top three S&P performers — the same kind of halo a great tech stock has — and the sales are on the rise.

Amazon. Best Buy. Both are brands that understand that the experience is the totality of online, offline, merchandise and price. All of that creates the brand.

I return to what I always say…Digital is everything, but not everything is digital. Best Buy is all over how to use digital to enhance the physical experience. Amazon, so digitally sophisticated, is getting smarter every day about the real world manifestations of their brand.

Technology isn’t the problem. And it’s not the solution. The Wall Street Journal recently wrote about the “new” unspoken problem of online retail — the large number of returns. That, however, has plagued the world of catalog sales since Sears started printing 300-plus pages in the 1890s.

So don’t buy the digibabble about the great divide between online and in-store. Not in a world where “geek squads” and Amazon stores are proliferating. The discussion isn’t about high tech or low tech. It’s about building brands and driving sales by putting the customer first.

Photo: Nicholas Eckhart/Flickr