Sep 23, 2003
SUMMARY: Absolutely worth reading if you want more offline retail sales (especially with holiday shopping coming up.) Includes data and details on a new feature on REI's site that's increased brick-and-mortar shopping by 15-30%.
Plus, if you only measure search marketing effectiveness by direct sales from clicks, read on.
Joan Broughton tells the story of how REI got multichannel
"In 2000, just before I joined REI, it seemed like the Web site was really taking off. So, they said, 'Let's try not doing a major catalog this spring,' Not only did sales drop off through traditional channels such as phone, but Web and retail sales dropped as well.
"It was a great indicator of how catalogs have changed. It's not a closed-loop sales device anymore. It's a great marketing tool for all channels."
She notes, "When you add another channel, it doesn't mean
customers change allegiance. People will shop however they want to. A lot of retailers are siloed, thinking this person is a retail shopper so treat them this way. We're seeing more shifting."
Sure, REI still has some customers who stick unremittingly to a single channel of choice. But they are an ever-slimming slice of the shopper pie.
Plus, the customers who do use all channels, wind up spending more all around. "The common wisdom is true."
Therefore, Broughton's goal is to get people in each media to convert to shopping in other channels - especially driving Web traffic to REI's quickly expanding national chain of 66 brick and mortar which feature heavy-duty customer service and in-person education that no other channel can match.
She's focusing on four specific tactics:
-> 1) Using search marketing as a prospecting tool
Although REI has stores and catalogs sent across America, it's not well known in some regions. In fact, Broughton's own family in the Northeast had never heard of REI until she started working there.
So, she spreads out search marketing campaigns as wide net to educate newbies who've never seen a store or catalog. This is a radically different approach than many eretailers who simply see search as a direct response tool for immediate online sales.
"We see the Web site as an introduction for many people to REI. Search marketing tends to bring in people who may look around a couple of times before conversion. Or, they don't buy through the site when they see, 'Oh there's a store right down the street.'
"Again that's why if you just think of the Web as a sales channel, I think you're missing the bigger picture. Not
everybody who comes to the site needs to buy on the site to make getting that person to the site worthwhile."
-> 2) Enabling localized email campaigns
Inspired by retail store managers' "pent up demand", last year Broughton's team started a pilot localized email program.
She notes this is particularly important for retailers whose offerings would be affected by regional tastes or weather trends; as well as for retailers who tend to have in-store special events.
Centralization is the key to making localized campaigns work.
"I've spoken to retailers who really struggle with this. You want to have a consistent message and branding in email." And if you give local stores too much control over email, consistency can fly out the window.
So, REI's marketing team at headquarters work, respectfully, hand in glove with the local stores, scheduling, creating and broadcasting store sends for them.
-> 3) Site navigation: Spotlighting the store location finder
In deference to REI's goal of using the site as a multichannel sales funnel, Broughton's team added a large navigational "Stores & Events" tab at the horizontal top of site pages earlier this year.
"It was always on the left nav bar," Broughton notes, "but after we added the tab we saw an increase in visits to those pages. It's nice to be able to spotlight the people in stores a little more. They're very enthusiastic."
Next she plans to offer stores the ability to create their own pages on the site, while keeping brand and navigation consistent.
-> 4) The killer app: in-store Web order pick-up
The program Broughton's most excited about is REI's new in-store pick-up offer for Web customers. It's promoted enticingly in the shopping cart as a "free shipping" option.
The day it launched just two months ago, Broughton kept it very low profile until she was sure it would work. "There was nothing on the home page - no real big splash or visibility." After placing a test-order herself first thing in the morning, she sat back with fingers crossed.
"By the end of the day, we had orders that were sent to 60 of our 66 stores," she says jubilantly.
Next she visited a store herself to chat with service staff who handled distributing packages to Web customers who came in for pick-ups. The experience was highly encouraging.
"There were about 90 pieces that day. The woman working there told me it's almost invariable - customers come up to her with their receipt, get their package, and go right back into to the store and keep shopping."
So, orders placed online are directly driving additional in-store sales.
Roughly 15% of orders coming through the REI.com site, and more than 30% of orders placed at the REIOutlet.com site, currently request in-store pick-up.
Broughton notes this may be higher than other retailers will experience with a similar offer because many REI mail order purchases - such as car racks - include fairly hefty shipping fees. However, it's definitely a concept other retailers should test.
In the meantime Broughton's next challenge will be to integrate REI's online and offline gift registries…