Friday, October 30, 2009

The power of touch.

We’re supposed to be hurtling toward an age where all business is done through ones and zeros, with sales and service more efficiently handled online.

To be sure, we see many examples where this is producing a better outcome for marketers and their customers. Witness iTunes vs. Tower Records, Netflix vs. Blockbuster, Amazon vs. Barnes & Noble or Expedia vs. your neighborhood travel agent.

But this rush to virtual selling is not a one-size-fits-all strategy for all categories and marketers. Some recent examples illuminate our desire to see, touch and feel products, and how the best service is often carried out face to face.

What got me thinking about this is Microsoft’s announcement that it is opening retail stores, with the first launching in Scottsdale and Orange County. Like Apple stores, these outlets will sell hardware and software and offer technical support for people who are proud to be a “PC.”

And speaking of Apple, reports suggest that its stores generate more revenue per square foot than any retailer in the country. What more need be said about the power of a strong retail concept?

Recently, General Motors took the bold step in California to sell its cars on eBay. Great idea, lousy results. Turns out people prefer coming into the dealership to haggle. (I’ve witnessed this dynamic before in automotive research. Customers say they hate haggling but don't want to accept a fixed pricing model.)

Best Buy, a client of BD’M, has a strong online sales channel but knows that its key source of differentiation and repeat business is the knowledge and objectivity of its “blue shirts” working the store aisles.


Jyske Bank, Denmark's third largest bank, represents one of the most famous case studies on the power of a unique retail experience. Jyske re-imagined their savings and checking services as physical "products" to make them tangible and clear and evoke an emotional connection. They created that special "third place" -- a haven that is neither home or work -- that has been the secret sauce behind Starbucks' success. The result? Ad Age reported that Jyske Bank doubled its customer base in one year by improving loyalty while attracting new customers.

I am fortunate enough to have earned United’s double-secret “Global Services” status from our client. The aspect of the service I value most (other than the really cool black card!) is the GS hotline where the phone is answered by a real, empowered person before I even hear the first ring. While not an example of brick and mortar, it is another way to give customers the satisfaction of real and helpful interaction, not automated voice prompts.

The lesson to be learned may be that we are a prisoner of our vocabulary. Brick and mortar. Click and mortar. Retailing vs. e-tailing. Perhaps it's simply about the reassurance customers get from real live human interactions. That can happen in a store. That can also happen online via “click to chat.” Either way, it has to happen. I think we’re starving for true contact.

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