THE BLOG
10/24/2012 10:28 am ET Updated Dec 24, 2012

Starbucks: Using Online to Enhance Bricks and Mortar

The Challenge: As e-commerce grows in popularity, brick-and-mortar retailers are finding themselves losing more and more sales to online outlets like Amazon.com. But how are some of the most successful brick-and-mortar retailers holding their own against online retail?

According to STORES' list of the largest U.S.-based retailers, Amazon.com has outperformed most brick-and-mortar retailers to rank 15th in the nation, establishing itself as America's fastest-growing retailer. Like many successful online retailers, the website achieved success via competitive prices, fast shipping, and personalized offers that leverage a considerable customer database. So how are brick-and-mortar retailers fighting back? By using technology to upgrade customer service and create the same convenience in-store.

Mobile point of service

Retailers are equipping sales forces with smartphones and apps that allow them to re-price items, check inventory for customers, and conduct sales transactions on the spot. This spells a potential increase in employee efficiency and customer convenience at every point of contact. Lowe's, in particular, has taken this method to heart, distributing iPhones to all 42,000 of its employees.

Precision Retailing

Precision Retailing is a customer service solution created by SAP that anticipates customers' wants and gives them personalized discounts and offers at the appropriate time. This is accomplished by gathering multi-channel customer data and applying a system of predictive analytics. The technology allows stores to personalize shopping for customers in-store by sending mobile coupons and suggestions to their smartphones as they shop, and rewards customer loyalty by offering discounts based on their most frequent purchases.

Mobile Payments

Starbucks is a mobile payment pioneer, with over 70 million mobile payments made through their app since January 2011. But in addition to the existing Starbucks-exclusive payment app, Starbucks is expanding to support the multi-business Square Wallet app. The Wallet will allow customers to use the Square directory to find Starbucks locations, and will eventually add the ability to tip via smart phone, which will allow Starbucks and other businesses to measure customer satisfaction in real-time.

KEY TAKEAWAYS

1. Customer service is key
Customers buy from online outlets because it's often more convenient than dealing with their offline equivalents. Information is easier to come by, product comparison is simpler, and transactions are easier to conduct. The businesses above have shown that if you can streamline those processes offline, you can be competitive with online outlets.

2. Upgrade your sales process.
Regardless of how good an employee is, they can't be everywhere at once. Arm them with the technology they'll need to do their jobs to the best of their ability. The more efficiently they can accomplish their tasks, the better they can help your customers at each touchpoint on the purchase path.

About Ernan Roman Direct Marketing Corp., (ERDM):
ERDM provides Voice of Customer-driven Customer Experience Marketing consulting services for companies such as IBM, MassMutual, QVC, NBC Universal, Microsoft, Hewlett-Packard, and Symantec Corp. They have conducted over 9000 hours of in-depth interviews with customers and prospects of these clients to gain an in-depth understanding of their expectations for a high value customer experience.
Ernan Roman, President, is recognized as an industry pioneer and was recently inducted into the Marketing Hall of Fame for creating three transformational methodologies: Integrated Direct Marketing, Opt-in Marketing, and Voice of Customer Relationship Research.
He was also named by Crain's B to B Magazine as one of the "100 most influential people in Business Marketing".
His latest book on marketing best practices is titled, "Voice of the Customer Marketing: A Proven 5-Step Process to Create Customers Who Care, Spend, and Stay." 2010-12-08-ernan.jpg
Ernan is also the author of the widely read blog, "Ernan's Insights on Marketing Best Practices", (www.erdm.com), and author of "Opt-in Marketing" and "Integrated Direct Marketing".
www.erdm.com
ernan@erdm.com