ETD: 884 How do manufacturers use e-commerce; Window Shoppers;
Nordstroms Is the Luxury Leader to beat
E-Tailer's Digest
etd_post at gapent.com
Thu May 5 11:15:41 GMT 2005
E-Tailer's Digest --- Everything for the Retailer
Issue #0884 May 5, 2005
George Matyjewicz, Moderator mailto:georgem at gapent.com
Published by: GAP Enterprises, Ltd. http://www.etailersdigest.com
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CONTENTS
[1] Greetings
[2] How do manufacturers use E-commerce
[3] Online Consumers Window Shop More than Impulse Buy
[4] Nordstroms Is the Luxury Leader Neiman Marcus Got to Beat
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[1] Greetings.
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Hi All:
List member Janet Attard would like to know how manufacturers are using
E-commerce from a cost savings point of view, i.e., what have they saved in
distribution because of a site.
We have more information on window shopping from list member Javilk who
offers a different, and interesting view or shopping cart abandonment. Who
abandons the cart?
Luxury market guru Pam Danziger says Nordstrom's is the retailer to beat in
the luxury market, and one the Neiman Marcus should watch. BTW, Pam was
quoted in the Wall Street Journal article about Neiman Marcus. She knows
her stuff! I find it interesting to note that the luxury consumer is a
family income of $150,000 and above that make up the top 5 percent of
households by income.
Tel us about your business, which will remain for posterity at
our "Members: Who Are You?" site. This is a courtesy to our members who
contribute to our forum, and not merely a way to advertise for
free. Anything to do with the retail world, i.e., supplier, retailer,
consulting, etc. http://etailersdigest.com/resources/members/index.htm And
we have a form there for you to tell us about you. As I said when I first
proposed this idea, we have "known" each other for a long time, yet we
often don't know anything about each other. So, tell us who you are and
what you do.
Now, let's get to everything for the retailer.
Sincerely
George Matyjewicz, PhD
Chief Global Strategist, GAP Enterprises, Ltd.
mailto:georgem at gapent.com
http://www.etailersdigest.com
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[2] How do manufacturers use E-commerce
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I'm looking for examples of manufacturers who have successfully
implemented e-commerce sites, that do any of the following and would be
willing to talk about the results they've had from e-commerce sites:
1 ) use an e-commerce site to increase productivity and reduce the cost of
selling to distributors (in other words, the distributor orders through the
manufacturer site instead of faxing or e-mailing orders);
2 ) to allow distributors to sell directly to the consumer through
manufacturer-approved/created websites (i.e.: the manufacturer sets up a
e-commerce website and co-brands it with the distributor's name and logo.
Consumers would be directed by the distributor to go to this co-branded
site to place their order directly.
3) Manufacturers who sell directly to the consumer themselves. (In the
latter case, I'm interested in what effect selling direct has on
relationships with distributors.
--Janet Attard
Business Know-How Small Business Resource Center
http://www.businessknowhow.com
Free newsletter: www.businessknowhow.com/subscribe.htm
+++ [Moderator's Comments] +++
I can give you experience with two of our clients (NYC-based) who sell
textiles. We first put up a site for them in 1998 with the intent to be an
initial resource to pique interest of designers who need fabric for
projects, e.g., hotels, mobile homes, office cubicles, etc. In 2000 they
put up the second company which sells to a different market. They both
took off very well, and both have expanded to now include over 10,000
product swatches on each site (some same some different products).
The results:
1. They no longer send out sample swatch books to designers, which saves
them $50,000 each quarter in postage alone! Their total annual costs
(preparation of sample books, mailing, postage) savings are over $500,000
each year!
2. They consistently get two new orders a day from customers whom they
would never have know before this. Their sales force couldn't call on
these clients in the remote areas.
3. They have found new sources of product from overseas suppliers who
discovered their site.
4. The site statistics allow them to reorganize their offerings, i.e.,
they watch the images viewed each month to see what is of interest to
visitors and what is not. They then decide whether to promote a product or
drop it from their line. In the past, this was done during "market week"
events when they judged the pulse of the 100 or so people who visited them
once a quarter. Now they see the stats for 2,400+ visitors a day!
4. Probably the most important result is one of the owners bought his
dream house in Hawaii, and runs the sales efforts from there! In the past,
when travelling he would have a sales report faxed to him, which was often
100+ pages. Now he gets his results via e-mail or FTP.
Each client spends approximately $50,000 annually with upgrades to the
site, i.e., removal of last year's patterns and adding new patterns for
this year. Some years (like this one) they could spend double that amount,
as they reorganize their entire line. And it is well worth the
money. Their business has thrived in a time when the textile business has
died in the U.S.
George
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[3] Online Consumers Window Shop More than Impulse Buy
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> "The shopping cart abandonment issue is the most important thing that we
> uncovered," said Ken Leonard, CEO of ScanAlert. "Most merchants think that
> shopping cart abandonment is just part of the online shopping process."
> His study showed the average time delay between a consumer's first visit to
> a Web site and the first purchase was just over 19 hours. About 35 percent
Thus one has to ask the paradoxical question: Who abandoned the shopping
cart? If they came back, and can't see what they put in a shopping
cart, it was the seller who abandoned the shopping cart, not the buyer!
You, the retailer, need shopping carts which can be parked for three or
four days, and still retain contents.
And if you are selling consumables, you need something like that clerk at
the feed and grain store who remembers you always buy 10 lbs of dog food
and 100lbs of corn for your chickens.
Actually, none of that is very hard to do.
Habits don't change, only the ability to express them. People always take
time to make buying decisions. Help them!
Give your customers a shopping cart they can:
* "park" for up to three - four days as they wander in and out,
* print in the form of a shopping list with local store locations and maps
* send to a specific retail outlet for a set-aside pickup (some book
stores do this already)
* ask UPS / FED EX to deliver
* Persists in the corner with prices after your customer leaves
Actually, what you need is not a shopping cart...
YOU, the retailer know more about YOUR customers than the experts! Your
web logs hold reams of data awaiting your analysis. (Or my analysis...)
Don't discourage people from leaving, encourage them to come back. As
often as they wish, making shopping cart recovery easy, so they don't have
to pick up everything again every time they come.
If you are a manufacturer or wholesaler, you want your customers to be able
to take those orders to your retailers, to search YOUR PRIMARY dealers for
best price based on distance from them, etc. (As opposed to letting them
find grey market alternatives...)
Paradoxical question: Why use a shopping cart for comparisons? Shopping
carts are for supermarkets! Are you a supermarket?
Neiman Marcus and others use clerks as assistants, not
shopping carts. Build something to "remember" "your interests", etc. Make
it easy for your _guest_ to go back to any page s/he has looked at, or to
click an order button for an item in the list of pages. Don't make it look
like an order form or shopping cart; but a remembrance service "with
options". Not a frame that spoils bookmarking; but a small separate window.
That also suggests some things about the structure of your site; how you
group products, etc. You do that carefully in a retail store, so you
should also take some care with your web store.
You need to recognize how long a person takes to get your images, and
decide how to present based on his bandwidth. Shop your own store
often. Look at how you chose things. Analyze your logs for how people
walk through your site, and how they come back.
-javilk-
------------------- IMAGINEERING --------------------
--------------- Every click, a vote. ----------------
----- Do people vote for, or against your pages? ----
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[4] Nordstroms Is the Luxury Leader Neiman Marcus Got to Beat
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Now that the Neiman Marcus deal is done and Texas Pacific Group and Warburg
Pincus LLC have acquired the luxury chain, they need to develop competitive
strategies to capture greater market share among the super-affluent luxury
consumers (i.e. incomes of $150,000 and above that make up the top 5
percent of households by income ) that they target.
Nordstroms is the competitor that Neiman Marcus has to beat. In our latest
Luxury Tracking study of luxury consumer purchases, Nordstroms is running
circles around Neiman Marcus among the super-affluent luxury consumers
where Neiman Marcus focuses its marketing efforts.
While brand awareness of Nordstroms and Neiman Marcus are virtually
identical at the top end of the luxury consumer market, the actual
percentage of luxury consumers that made a luxury purchase at Neimans in
the first quarter of 2005 is only 14 percent, compared with Nordstroms
which attracted 33 percent of super-affluent luxury consumers to make a
purchase, according to Unity Marketing’s latest survey among 731 luxury
consumers.
It is going to take more than just expanding their store base to make
Neiman Marcus more competitive. One of Nordstroms’ secrets of success is
not only that they offer great luxury brands and provide customer service
that is the best-practices’ benchmark in the retail industry, but
Nordstroms is a democratic luxury leader that caters not only to the top 5
percent of U.S. shoppers, but also targets luxury consumers at more
moderate income levels, from $75,000 to $149,999 which represent 22.4
million households.
Nordstroms draws customers from a much wider base, while Neiman Marcus
focuses almost exclusively on the 5.6 million super-affluent
consumers. Despite the fact that the super-affluents spend two-to-three
times more in most categories of luxury than lower income affluents, the
large number of households ranging from $75,000 and up means that the total
market potential is greater among the $75,000 to $149,999 market segment —
$498.1 billion as compared with $349.2 billion among super-affluents, a 43
percent difference in favor of the lesser affluents, based on annual
spending data from 2004.
The numbers clearly favor Nordstroms with their strategy toward democratic
luxury.
For more information about Unity Marketing’s luxury research, visit
www.unitymarketingonline.com where visitors can also download a white
paper by Pam Danziger entitled, “The Eight Things Every Marketer Needs to
Know about the Luxury Market.”
Pam Danziger, President
Unity Marketing
Author of Let Them Eat Cake: Marketing Luxury to the Masses — as well as
the Classes.
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