PetSmart acquired Pet360 for $130 million in cash and up to $30 million more in future performance-based payments.
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Reviews are workable in most categories so integrating this functionality is now a reality for a broader merchant base. It is essential that you populate your site with significant reviews so putting in place a marketing plan that garners participation is optimal. Over the holiday season I sensed greater adoption of this capability and more incentives for customers to submit reviews on-site and via e-mail, which will better accommodate the consumer perspective.
It’s interesting to see the influence of loyalty programs on merchant thinking and for me it’s not surprising as it’s an important influence when I think of where to start my own shopping. When asked, “Prior to your last online purchase, which of the following activities helped you decide where to purchase the product?” 21% of respondents said loyalty programs were an important influence. For visitors in the browse mode, loyalty programs set the tone for that decision. 54% of consumers found such programs very to extremely helpful yet the merchant’s value quotient came in at just 38%. As retention continues to challenge merchants and technology providers like Loyalty Lab make available cross-channel loyalty capabilities, we would expect to see more merchants participating in such efforts making these programs even more important to the consumer.
Another technology that seems to be gaining in popularity among consumers is live chat. 41% of consumers rated live chat as very to extremely helpful while only 28% of merchants rated it that high. That low opinion is reflected in the 4Q05 Mystery Shopping Survey, which found only 27 of 100 merchants surveyed employing live chat. These findings are indicative of the fact that consumers are now comfortable with this technology and like the immediacy of an answer. Merchants should evaluate the cost/benefit analysis of live chat along with projected conversion rates for their business.
The takeaway for merchants must be that the Internet has fundamentally shifted the power equation to where consumers demand a more interactive, engaging experience. For those merchants who listen there will be a plethora of merchandising opportunities. The challenge then becomes one of prioritization where knowing your customer, your brand and the resources you can put to bear on these tasks will be the determining factor. The failure to step up to these necessary investments has great risk, while the upside for merchants who embrace the consumer will be higher conversion rates and, ultimately, greater revenue.