It is predicted online shopping will break the $1billion mark by the end of the year and it looks like it will be growing even more in the near future. There are so many advantages as a consumer; convenience, time saver and instant shopping comparison are just a few of the many benefits. With all of this e-commerce, where does this leave the retailer or business, both big and small?
To many, it reduces them to just a price point with no real distinguishing value. This has caused many brick-n-mortar brands to disappear or become reduced to just a shell of their former glory. With all of this rapid change and price shopping dominance, does this also mean there is no need to create a strong brand? In my opinion, it is the opposite, having a strong brand is more critical now and in the future. Here is why I think this:
• Lack of physical contact means brand recognition has to work harder – Because people are shopping more online, they cannot feel, touch and otherwise, engage physically with your products, so many decisions come down to brand recognition. If they don’t know you, then most likely, you won’t make the first cut. Shopping online is also a function of trust. Customers are making decision on what they currently know about your brand. If they trust it, this reduces the risk factor. Often great products and services are not purchased because the customer thinks, “I’ve never heard of that brand before.”, then gravitate towards the brands they do know something about. This lack of physical connection that a brick-n-mortar store allows forces brand recognition to have to work even harder.
• Avoid the price war trap – Online and comparison shopping has reduced many of our purchase decisions to just a price point, regardless of the intangibles. It’s hard to “feel” or experience the quality just from your computer screen. A lack of a strong brand makes you 1 of 1,000 who offer similar quality, similar price and similar features. Not many companies can win the price war, especially small to medium sized businesses. For example, if the concept of Target was only online, then they wouldn’t stand a chance to Wal-Mart, but many people are willing to pay more for the Target experience than save a few bucks and shop at Wal-Mart. It’s the feel of a Michael Graves gadget or the fit of an Isaac Mizrahi dress. Both of these examples deliver something more than just a price point. They deliver on Target’s unique brand of cool chic at a low price (notice, I didn’t say “lowest” price.) A strong brand helps you break away from the price war game. Apple is the gold standard in proving this concept.
• Reviews are good, only to a point – I know many people believe in customer generated reviews. They take them as gospel and depend on the “wisdom of crowds” theory that many digital companies embrace (Google, Amazon, Yelp). What about plunking down $500 for a flat screen TV brand you’ve never heard of? The reviews are good, the price is great, so why the hesitation? It’s usually because there are TV brands you’ve heard of with similar features and price point that are also being shown in your search list. A vast majority of shoppers will consider the brands they know first before they drop down to the names they don’t know. By then, the no-name brands have already lost the sale.
As the world turns more to online shopping, it creates both crisis and opportunity for all brands. If you have not invested in creating a strong, great brand in your customer’s mind, then it is crisis time for you. Now you are reduced only to a price point and are at risk of not even making the first cut on a customers online list. It’s a great opportunity if you have consistently invested in building a brand that has real intrinsic and emotional value in your customer’s heart as well as their mind. Now, when you show up on a list based on a specific search criteria, more customers will keep you as a choice since many feel they already know you and have an emotional connection to your brand.