How retailers can win online in the face of cross-border competition
When I was in year 11, my high school was the first in South Australia to have an entire room of micro-computers. At least that’s what they called them then, but ‘micro’ in the 80s simply meant it didn’t require two people to lift it. They were BBC Micro 32’s, so named because they had a massive 32 kilobyte memory (the average bedside clock nowadays has more than that)! I still remember the monochrome CRT monitors with pixelated orange text. As an introduction to emerging technology, I was impressed. We learned how to send messages to one another around the classroom without being caught by the teacher. We even learned how to write a ‘space invaders’ game in Basic. Computing was pitched as a novelty, an amusement for people who had plenty of time on their hands. The realm of business computing was still confined to large computers the size of a Fiat Bambino.
10 years later, I created my first website. In fact I still have it archived on my computer. It’s too embarrassing to show, but I’ve kept it because it crystallises my perception at that time of what a website was meant to be. Wow, how have things changed since then! Ironically, my personal website was akin to my personal Facebook page today, littered with all my favourite things, and exhibiting accomplishments I was proud of. The idea of total strangers viewing my website never entered my head. Back then, Netscape was the portal to an endless world of information, and ICQ opened doors to unexplored cultures and people. The word Google hadn’t been invented yet. Going online meant checking whether anybody else was using the phone line, and then suffering the screeching and stuttering of the modem signal searching for a dial-up connection. How I was patient enough to wait for the slow response times I’ll never know. I guess we didn’t know anything better was possible, right?
Fast forward another five years and the internet was starting to making the world a smaller place. I had an early mid-life crisis at the age of 30 and responded in the way any rational man would, I bought a Mercedes Benz coupe! By then I had become an online native, so the idea of paying full price to a local car yard was not an option, especially when I discovered the car I wanted was available 85 per cent cheaper in Hong Kong, and the steering wheel was on the correct side. So I bought the car in Hong Kong, without even leaving my house. Three weeks later I collected it from a shipping yard in Port Adelaide after paying the shipping and import charges. A quick visit to the mechanic for some compliance adjustments, and I had a head-turning Merc in my driveway for half what they were selling for locally. I had discovered the (as yet largely untapped) power of the internet in a very practical way. I also personally experienced the critical role trust played in transacting online.
The internet has evolved dramatically since then, and for many of us, buying goods and services from afar is now second nature. The internet has opened up opportunities galore, and I’ll never buy anything of value without first having researched it thoroughly online.
Today the internet offers global reach for consumers and vendors alike. But for merchants, that reach is bittersweet, because it also means potential customers are exposed to competitors that once the tyranny of distance nullified. Thus today’s greatest challenge for online retailers is the ability to win business in a highly competitive global landscape. Where once they wouldn’t even be considered competitors, today’s online retailers find themselves competing with progressive and well resourced vendors in other countries. The bar has been raised.
How do retailers win online today in the face of such cross border competitiveness?
The answer is more conceptual than practical. Ironically, traditional sales techniques don’t work as effectively online as they do face to face. Being face to face with a customer allows you to connect and influence them in real time, plus most people won’t just walk away in the middle of a conversation. Online however, clicking the ‘Back’ button is a default reflex whenever anything doesn’t quite feel right. No conscious thought is required. Retailing in a physical store allows the vendor to observe and respond instantly to customers’ body language and facial expressions. In a physical store, the environment can be curated to eliminate most distractions, immersing and engaging customers in a memorable brand experience. Customers’ objections can be heard and disarmed instantly, making it harder for them to say no.
None of this is possible online. That’s because online shopping is buyer driven. It’s akin to catching fish. You need the right rod, line and hook for the fish you’re trying to catch, and most importantly, you need the right bait. Chasing the fish is unlikely to succeed. Instead, you have to entice the fish by arousing its curiosity. Understanding the behaviours and preferences of the fish you’re after is the difference between a catch or going home empty handed.
Winning a sale online takes much more than simply disarming the customer’s objections. Conversion only happens after attraction and engagement, each of which needs to be carefully planned and implemented to suit the target customer segment. Just like a self-steering car, the sensors, triggers and stimuli to guide customers down the desired pathway must already be in place before the customer even enters the retailer’s space. Since online customers are dictating what they click and view, the task of online retailers is to understand what influences subconscious and intuitive reactions, and curate their online experience accordingly within the framework of their own brand. Effective online marketing relies on an understanding of customer psychology.
Given the lack of human contact when shopping online, it’s not surprising that many online shoppers have feelings of doubt, suspicion and distrust when browsing online. Addressing these subconscious negative emotions is another key factor in winning online. Conveying credibility, transparency and reassurance are critical. When we identify a product online that we’re interested in, the thoughts that enter our head include “who am I buying from?”, “are they honest?”, “are they reliable?”, “will I actually get what I’m seeing?”, and “what happens if something goes wrong?” Anticipating and proactively addressing each of these instinctive concerns will go a long way towards instilling confidence in your online customers. Merely placing the answers on an FAQ page is not going to do the job, although you should do that too. Careful placement of contextually relevant messaging and options along the customer journey are likely to be a lot more effective. Why? Because online shopping is more often done in auto-pilot, so the less conscious effort is required, the more comfortable most of us feel.
Finally, demonstrating credibility online is best achieved by being present across all regular channels that your customers are likely to be involved in, including websites, mobile devices, marketplaces and social media. Nothing suggests that an online retailer is dubious more than not being able to find them in Google, or in mainstream social media. Be everywhere your target customers are, and they’ll begin to feel more at ease. The more often you see somebody, the more you feel you know them, and the greater your trust in them grows. That’s how brand equity is nurtured.
To win online, walk through your customer experience step by step, identify potential friction points, and implement strategies to enhance credibility, reduce friction and engender trust. Make it so easy that purchasing becomes a natural response.