Internet Retailing

18 March 2015

Traditional store-based retailers might be forgiven for feeling that pureplay retailers have an intrinsic advantage. The online experience lends itself to being personal and unique through the introduction of simple cookie tracking and data caching. With the growth of mobile websites and applications, this personalised experience can be accessible anywhere. The success of online businesses is not solely attributable to their ease of use, their ability to leverage cross selling and up selling opportunities is critically important.

Amazon have previously declared that 35% of their sales come from their cross selling algorithm. Studies performed into upselling by Predictive Intent have revealed that 4.25% of customers are influenced at point of purchase to ‘trade up’, when shown a more expensive alternative. This may seem like a low percentage but it represents a highly profitable potential. Given the right conditions, certain customer groups can be influenced by an appropriate uptrade marketing message. American clothing retailer Nordstrom does this effectively by presenting trade up options to customers whilst browsing with reviews and offers clearly displayed to sway these customers; while research by Cisco shows that 52% of customers are influenced by online reviews and ratings. Store-based retailers face the challenge of matching the relevance, personalisation and service of the online environment.

However, “Bricks and mortar” operators have a distinct advantage Internet retailers cannot replicate; the face-to-face customer interaction. After all, sales associates have delivered personalised service and upselling for hundreds of years but it has always been dependent on the quality of the person serving. Integrating technology into the store environment provides the potential to level the playing field with the ecommerce environment and maybe even tilt the balance in favour of stores. Sebastian James, Dixons CEO has claimed “We are seven to 10 times more effective than Amazon at doing that [upselling]”.

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