Groupon says its focus is on the bottom line, rather than top-line growth.
For nearly a year, Staples.com has used a “Guided Selling” tool provided by Active Decisions to assist web shoppers to find the right electronic product that meets the needs of an individual shopper.
Using the power of product databases in selling electronic and other products whose technology features can be readily compared is one of the keys that distinguishes web merchandising from in-store sales. At the web site, the shopper can readily access these databases to compare complex products, but in the store the sales associate simply cannot access the same product knowledge.
Staples.com is a prime example. For nearly a year, Staples.com has used a “Guided Selling” tool provided by Active Decisions to assist web shoppers to find the right electronic product that meets the needs of an individual shopper. At the eTail 2004 conference this week in Palm Springs, CA, Staples executive vice president Paul Gaffney demonstrated how this powerful tool works to improve conversion rates and customer loyalty. Showing a sample screen of the office supply merchant’s web site, he demonstrated how a web shopper looking for a digital camera responds to a series of radio-button questions that identify the key features of the type of camera the shopper is looking for or the various purposes for which the camera will be used.
A click on the “Help Me Decide” button yields a side-by-side comparison of three cameras that best meet the needs the shopper has identified, ranked in order from best match to third best. For each selection, the Active Decision’s tool displays a short narrative explaining why each of the three cameras was recommended as a match to the needs that the shopper identified.
The key to the Guided Selling tool is the product database that Active Decisions has assembled to power it. The company’s team of product analysts scours manufacturers’ web sites to collect data on key features of electronic products that it cannot otherwise get from agreements it has with certain manufacturers to provide product information. The team, with some assistance from Consumer Reports, then “normalizes” the data in similar sets that can be compared and uses a modeling program that matches consumer needs to product features. This painstaking data-gathering work is clearly an important feature in marketing the Guided Selling tool. “Product data collection is a high pain point for retailers,” said Darby Williams, vice president of marketing for Active Decisions.
While Gaffney did not reveal how much the Guided Selling tool has boosted web site sales and conversion rates, Jeff Dunn, CEO of Active Dicisions, who also made a presentation during the same session, disclosed research from the web site of a Fortune 50 company that compared 50,000 shopping sessions with the Guided Selling and 50,000 sessions without the use of the application. The shoppers who used Guided Selling, said Dunn, purchased $3.6 million more merchandise from the web site than shoppers who did not use the tool, a 20% sales lift.
Spurred by the lift Guided Selling has given to its web sales, Staples is now piloting the same comparison shopping technique at two of its 1,200 stores. In the pilot, sales associates are equipped with hand-held computers that connect to the web site using wi-fi connections. In a demonstration, Dunn played the role of the store shopper looking for a digital camera and Gaffney played the role of the sales associate, asking the same questions that would be asked at the web site to determine the shopper’s needs. The sales associate simply keys in the responses on the handheld and submits the inquiry via the web to get the three recommended products, along with a long list of features of each one that match the shoppers` requirements.
While only two stores are in the test so far, Gaffney explains that the store will soon roll out the tool to 70 more stores and, if it continues to show positive results, eventually to most stores. As Gaffney explains it, bringing this web application to the store is a necessity, simply because more store shoppers want sales associates to provide the same detailed product information and comparisons they can easily access at the store. “The Internet has changed the way we buy,” he said. “It’s created an increasingly empowered shopper who wants to come to the store and be engaged by a sales associate who can quickly find products that meet needs and provide them with relevant and balanced choices.”
The problem is that the shopper can often find such product research quickly on the web but not in the store, particularly when the store sells myriad technology-based products whose features are continually changing. The problem stems from the high turnover in store personnel (60% in computer and electronics stores), entry level compensation of $8 an hour, and from the nearly impossible task of giving all store associates the type of product knowledge that the web can offer with a simple link to a product database. “We can hire sales associates based on their friendliness and outgoing personality,” said Gaffney, “but it’s hard to hire for product knowledge. And when you’ve got high turnover and low wages, how many people can keep up with the dramatic introduction of new electronic products and technologies?”
By giving sales associates the power of a web-based handheld and the Guided Selling tool, he said, “we help make the sales personnel in the store become more comfortable doing their job. You don’t leave them out in the wilderness. This uses web-based technology to replicate throughout the sales force what the best sales professional can do.”