A lesson from Bank of America — Keeping a customer perspective

As an internet retailer, I have had to learn the hard way that our customers do not necessarily see our sites the way we see them. In fact, when we conduct usability studies, I am often shocked to find that what is very obvious to me escapes them completely.

Does that make them stupid? Of course not. Their perspective is just different. In their eyes, the retailer is the one that is stupid.

This hit home to me this week in a confrontation I had with Bank of America. I had one of those 0% teaser rates and set up the account online to deduct the minimum each month. The day the teaser rate expired, I paid off the account in full and closed the account.

Developing Personas to Boost Your Retail Success

Internet Retailer has an article this month about developing personas to boost ecommerce sales. If you do not know what I mean by “personas,” don’t feel bad; personas is just a code word consultants use that really means expensive customer behavior research.

Many large companies spend a lot of money on this kind of study and try to identify the mindset and goals of customers. In many cases, they might identify 2-6 different groups of customers and try to sell to them in different ways. For example, some customers are price-driven while others might be very dependent on user reviews. If you can figure out what types of consumers are visiting the site, you can attempt to determine on the spot which group each consumer is in and give them content that is more likely to result in sales.

Customer service is an important component of e-commerce

A new study from Kronos, Inc. discusses the phenomenon of retail sales shifting from brick and mortar stores to internet retailers. In a nutshell, the study states that internet retailers who expect to capitalize on this shift had better understand customer service.

I disagree with one of the conclusions of the article referenced above–that we are in an age where customer service is valued over the price. This is simply not true. All of my years of experience in e-commerce along with study after study show that customers are primarily interested in the lowest price. In fact, that is far and away the primary reason that internet retail took off in the first place.

Manufacturers fed up with internet retail?

Internet retailers are notorious price cutters, and manufacturers are getting fed up. I have been watching with interest the war between internet retailers and manufacturers for years, but there are signs that the battle is getting hotter.

Let me give you a brief history of this issue from my perspective. When I first started an internet retail company, I was a price cutter. That strategy worked; at least it worked for me. We did not own a brand at the time but instead specialized on obtaining in-demand products at lower than normal wholesale prices and dumping them on the market. It was (and still is) a legitimate business model that can generate a ton of profit, but will not make you many friends.

JupiterMedia Predicts Holiday Increase in Online Retail

JupiterResearch predicts that US online retail during the holiday season will grow to over $39 billion this year. This represents an increase of 20% over last year. About 126 million users are expected to buy online, which is a 6% increase over last year.

Internet retailers plan to drive their holiday sales primarily through search marketing, even though they are noticing that costs are rising and ROI is dropping. They also plan to increase free shipping offers and promote percent-off discounts.

None of this is a surprise. Internet retail has grown at 20% for the past two years after the huge explosion of growth early in the decade. As retailers find themselves fighting for their share of the stagnant (not increasing) pool of internet shoppers, they are becoming more desperate. It is no surprise that price wars continue to dominate the landscape.