Retail Archives - Page 4 of 8

Blogs are a stadium

Posted on September 9, 2010 by Steve Sammartino

I was asked today about how blogs should be built and leveraged from a commercial perspective. It seems to be a regular question I’m asked. The giving element that is required in the blogosphere seems counter intuitive to the way our minds have been trained via the industrial complex. They often struggle with the fact that we just have to give, and the law of natural economics just kicks in. So I came up with this analogy which I think makes sense and explains how it should be approached philosophically.

Blogs are like a football stadium.

The game is played in the middle of the ground.

In blogs the middle of the ground happens to be where our posts are geographically placed.

This is why people come to our blog. To see the action. To learn from and be entertained by the actual game (posts)

But like all good stadiums we have related infrastructure around the edges. Our details, company, tweetstream, contacts.

If they like the game we play (our posts) they return. The crowd gets bigger, and they tell their friends to come.

Like the stadium the revenue comes from all the related elements like the concession stands, the parking and the sponsorship. The stuff that generally lives around the edges… both in stadiums and our blogs.

But we must never forget why they are here. To enjoy the game. They only ever return because the enjoy the game (the blog posts). So what we need to do is build our industry around the game, rather than charging for tickets at the gate. Charging entry just doesn’t work beause there is far too many games they can attend. (more than 200 million in fact)

So when someone asks you about how to make a blog work. Remind them of ‘stadium economics’ and that it’s the quality of the information and entertainment which earns us the right to sell them the occasional hot dog.

Get in quick

Posted on August 4, 2010 by Steve Sammartino

Gus Johnston was walking past his local bakery in the Melbourne suburb of Elsternwick – Franks. It’s a 40 year old local business. He told me about a great little piece of marketing which inspired the title of this blog post.

On the bakery door, hand written was a little sign with the the words Opening Hours. Under it was: 8am until sold out.

It’s nice story which is perfect for what they do. Better hurry.

New on line supermarket

Posted on August 1, 2010 by Steve Sammartino

I’m developing a new website which is an on-line supermarket. Here’s some of the features I’ll be building into it in terms of usability.

If you want to place an order for milk, you must first look at all the items you don’t want to buy. They will pop up on the screen one by one. You’ll have to click past all of them. Then the milk will pop up after you’ve seen every other product for sale to click on. But after this, you then must click past all of the goods for sale again. The same ones we already showed you. When you want to proceed to the checkout, we’ll make you wait for maybe 5 or more minutes and show you many of the items you already saw on screen, again, just in case you changed your mind. If you decide to shop late at night at our on line supermarket, only one person can buy at a time, because we will restrict our ‘server’ so that all of our customers cannot buy their supermarket items simultaneously. This is because we will be trying to save a few dollars on serving people. A few people might leave and go somewhere else, but it will be a great expense saving idea.

Sounds pretty ridiculous right? Well, this is defined as ‘retail strategy’ in the physical supermarket world. Maybe it’s time they re-thought how they do some things. Right now there is tremendous opportunity for smart startups in the retail space employ on-line usability best practice to show some dinosaurs how it’s done.

Retail startups are rad

Posted on June 26, 2010 by Steve Sammartino

This guest post by Michael Fox. Michael is a co-founder of the design your own women’s shoe business Shoes of Prey. He blogs about the adventures of running a startup at www.22michaels.com.

5 reasons why retail startups are rad

Prior to starting Shoes of Prey, Mike Knapp and I were working at Google and were brainstorming industries that would be good for an online startup. We settled for online retail and here are the 5 reasons why:

1. There is so much room for innovation
Retail is an industry that’s 1000’s of years old and while there have been innovations, there hasn’t been an enormous industry changing event in that time. Online retail has the potential to change the industry more than anything else in it’s history.

Whether it’s offering products in a way that has never been possible before, like Pandora do with music, the brilliant use of customer and sales data at Amazon to suggest highly relevant products to customers, a new retail model like offering only 1 product (Woot) or deal (Groupon) per day, or tearing up old business models as Alice is attempting to do with grocery and Apple did with music retailing, online retail has enormous potential for innovation and there are so many ideas out there waiting to be executed.

2. Online retail is a growing industry
Figures can vary depending on exactly what is classified as ‘retail’, however online retail still makes up only a small percentage of total retail sales, in the order of 5%-6% in the US and less in countries like Australia. This is only going to grow.

3. An online retail business is easy to monetise
In addition to the difficulty of getting people to use your product, many online startups face the problem of how to make money from their business. Take Twitter and FourSquare. They’ve each built a fantastic user base, but they now face the challenge of working out how to make money from their product.

Like countless retail businesses for 1000’s of years, an online retail business sells a physical product so there is no need to develop a whole new business model for the business to be profitable.

4. There’s not a great deal of competition
The lure of getting rich quick by hitting on a winner in Apple’s Appstore or building the next Google or Facebook draws most top developers into those spaces resulting in a huge amount of competition. Most good web developers, when brainstorming what sort of business they want to start will avoid anything that involves a physical product like the plague.

If you and your team have the skill set to build a great website, and manage physical operations like sourcing physical goods and a physical supply chain, then you’ll face a lot less competition in the online retail space.

Of course you’ll potentially face some competition from traditional retailers moving into the online space, but particularly in Australia, that’s happening at a very slow pace. To help minimise that risk, but an innovative spin on your product and odds are you’ll stay well ahead of most traditional retailers.

5. The industry is small enough that you can have an impact early on
Online retail, particularly in Australia, is only just starting to develop. There are a number of industry groups and websites that have only recently started like Internet Retailing, Inside Retailing and Power Retail. Because these sites are relatively new it’s not too difficult to get coverage from them. It’s a similar story with conferences and industry awards. If you do something new and interesting in the online retail space you’ll soon be presenting at conferences and find your startup a finalist amongst some fantastic industry players.

If you’re thinking of doing an online startup I’d recommend considering online retail or applying a similar thought process to the industry you’re thinking of launching in.

Click here to follow Michael on twitter.

Time to share your thoughts:

If you run a startup, I’d love to hear about the factors that influenced you to choose the industry you operate in?

How not to run a promotion – the Chef’s Hat

Posted on June 4, 2010 by Steve Sammartino

I had a discussion with Luke Waldren who had a very poor customer service experience from the Chef’s Hat in Melbourne. For those who don’t know, the Chef’s Hat is regardred as the premier retailer in our city for restraunters, cafe owners and hard core Foodies. They sell a range of appliances and all things related to food retailing – except for the actual food.

Luke went down to buy a a Kitchen Aid appliance, for which he knew there was a promotion at the Chef’s Hat retail store. The offer was pretty simple: Buy a Kitchen Aid blender and recieve a free Kicthen Aid knife worth $49.95. A nice bonus offer for consumers. The offer is below – which mind you is on the front page of their website.

So when Luke arrives at the cash register to pay, there is no mention of the free knife. He then proceeds to ask and says. “Hey, isn’t there a free knife that comes with the blender.” The retail assistant claims no knowledge of the promotion. But luke brings out the iPhone and shows the bonus offer straight from their website as proof. The retail assistant then asks for the manager over the load speaker to come and help. When the manager arrives this is the conversation that transpired:

Retail assistant: “Are we giving away knives with these blenders?”

Manager: “if we have to…”

The manager then leans over to a draw filled with said knives, grabs one and throws it across the table to give to Luke. As though he got caught out. As though he lost one of his precious inventory to god forbid, a customer who entered the store because of the promotion.

If you are going to run a promotion. You have to mean it.

We have to advise those who didn’t know about it. We need to share the benefit with delight. We have to share the message that we go the extra mile and create more value than our competitors. If we are going to act like we don’t really want to participate, then we shouldn’t. Or worse, if we are going to treat our customers with disdain, then we’ll end up on blogs like this spreading the bad word.

Convention busting – retail

Posted on April 11, 2010 by Steve Sammartino

Long held wisdom in the retail industry is that items must be displayed on shelves by category. Idea being that we know what thing we are looking when we shop. But what if we’re just browsing? What if we don’t want anything in particular? Bring on Smiggle – stationary retailer who display their range by color.

Eyeball worthy…. I better go check out what they have in purple.

They aren’t the only ones moving towards it, as on line retailer etsy also display their range on line by color, with an amazing interface – check it out. It just works.

What other conventions need to be busted in your startup category?

Good Guys, Smart Guys

Posted on January 29, 2010 by Steve Sammartino

♫ Come in and see the good, good good guys. Pay cash and we’ll slash the prices… ♫

If you live in Australia, you’ve seen the TV advertisement and heard the jingle. It’s a pretty simple proposition. It encourages customers to negotiate a price. I went to the Good Guys to buy a fridge and negotiate like everyone else does.

After we cut the deal and agreed on a price, I proceeded to pay in cash, when the sales guy said; ‘Credit card is fine. We are not that strict on cash payments these days.’ So I paid using my card.

It got me thinking about the truth of the Pay Cash and we’ll slash the prices tagline / tactic. It is a simple point of difference and traffic generator. The idea of the cash payment is really something that can only work on a micro level. A large retailer couldn’t dodge the tax man through taking cash payments and justify provide an unusually large discount. The supply chain has too many parties involved. Rather, it is used to appeal the the customer who thinks they are getting a better deal by paying cash. It’s perception marketing. The insight for startups is this: if this works for the customer, that’s all that really matters.