Retailers Getting In On The Good

In his inauguration speech, President Obama invited us to a new era of responsibility and to choose our better history. The message resonates with people of all ages and circumstances.

With the economy continuing to take a toll on people across the income spectrum, it’s an interesting time to call people to action on behalf of those less fortunate than ourselves. Yet, that’s exactly what’s happening. I’ve written before about Ebay and World of Good, Kenneth Cole and Network for Good, Gap’s (Product) RED, and TOMS Shoes. The newest entrant: Starbucks with HandsOn Network and Oprah. The program encourages consumers to pledge five hours of community service before the end of the year.

Is this the new state of retail? Activism is a great way for brands to make their values clear and accessible to employees and consumers, in hopes of acquiring and retaining customers while also doing good. And retailers have something that causes don’t – a presence in neighborhoods, access to us where we live.

For years, the same handful of brands came up whenever anyone talked about doing good. The original do-gooders, like Patagonia, Ben & Jerry’s, Body Shop – where does that leave them? Happy that cause-based retail has caught on? You bet. And upping the ante on these newcomers. Patagonia has grown its environmental advocacy from supporting the Surf Rider Foundation to full-fledged leadership across diverse initiatives to protect the environment, from “Freedom to Roam” to”Voice Your Choice,” the Conservation Alliance, campaigns to protect the Arctic National Wildlife Refuge, and more. It’s a breathtaking range of issues and initiatives to support or participate in.

What’s next? More ways to get connected and involved. Documentary filmmaker Ken Burns created a program for outdoor retailers to promote the outdoors and outdoor activity to their customers in conjunction with a 6-part TV series about our national parks, which PBS will air in September. The program encourages retailers to co-host special outdoor events, sponsor park of the month nights, host a park lecture series, promote local outdoor or nature clubs, sponsor photo and essay contests, or host family camp-outs.

Burns told the Salt Lake Tribune last week that such efforts are especially appropriate in difficult economic times. "It's paradoxical but in the toughest times of the Great Depression, the national parks thrived as never before," he said. "We fell back on resources we didn't know we needed."

Burns, PBS, and the outdoor industry are betting the national parks will thrive again. And Starbucks? They’re just hoping to help us focus on something bigger ourselves. Already, over 1 million hours have been pledged to all kinds of causes – just since the inauguration on Tuesday! I’m in. What about you? Sign up to get involved.

With this one, we all win!

Haggling Over Price Not Everyone's Favorite Way to Shop

We have a friend – I’ll call him Richard - who negotiates with everyone on everything. He even once got a car dealer to throw the tie he was wearing into the deal. No joke. For him, it was sport, and he did it in a way that was natural…for him.

No doubt, there are lots of people like Richard who enjoy auctions and haggling over price. Ebay got its start as an auction site, and the idea of the garage sale has fueled the company’s identity from the outset. I have bought and sold a lot of stuff on Ebay – I bought a brand new MacBook on Ebay while standing in the Apple store waiting my turn for service. I bought a Bestey Johnson dress there, and I’ve sold lots of tickets to Giants baseball games there, too.

But I don’t enjoy haggling over price – I find it somewhat degrading, particularly for the seller. And I don’t like online auctions, either. They take too long to play out, and odds are that someone will bid more at the last second, meaning I’ll have to go find and buy the item somewhere else, anyway.

I prefer Ebay’s fixed price feature for both sides of a sale. And apparently I’m not alone. Brad Stone reported in a recent article in the NY Times, on the brewing e-commerce war between Ebay and Amazon. In the article, Ebay’s leadership admits that its unwillingness to embrace the fixed price side of e-commerce is a strategic miss that has contributed to the company’s current difficulties.

That got me thinking about ways retailers can sell more by letting the rest of us in on the price savings that some die-hard negotiators, like Richard, manage to finagle. Shangby.com is an interesting new site that does this by appealing to both people who enjoy haggling, and those who want to buy at a fixed price what has already been negotiated by a fellow shopper. CEO Steve Bell estimates that less than 10% of shoppers will bargain with a supplier, and Shangby provides tools that support the negotiation process including a live video conversation with the manufacturer or merchant facilitated by a Shangby concierge. For the other 90+% of shoppers, the site makes the merchandise available to all comers at the negotiated price and highlights the savings that the price represents.

So, the best-priced merchandise on the site is all stuff that a shopper actually bought, not just stuff that a merchant thought s/he could sell. And all shoppers benefit from the haggling one shopper took the time to do.

When I met with Steve, I asked about scalability. Turns out Brad Stone asked him the same thing as he reported a year ago in the NY Times . The folks at Draper Richards and G-51 saw enough potential to get past that issue, and funded the business.

Shangby’s value proposition seems to me mostly about undercutting Wal-Mart on price. Perhaps because of its focus on price, the site and format shortchange the cultural experience that I believe is possible here. In fact, I first told Steve Bell what I later told WorldOfGood.com – that there was a great opportunity to bring the romance of different cultures to life through the site and to feature more evocatively and less commercially the stories behind the merchants and the merchandise

That said, there is a kernel of an idea here that any e-commerce site, including Ebay, should appreciate.

Good Service – Is It Too Much To Ask For?

As the economy falters, more people are working harder for every dollar, and parting with it ever more reluctantly.

The Deloitte Research Leading Index of Consumer Spending tracks consumer cash flow as an indicator of future consumer spending. The index has been falling since October 2007 and fell again last month. "Consumers in nearly every income group are being more cost-conscious," said Stacy Janiak, Deloitte's U.S. Retail leader.

In this environment, what’s happening to customer expectations? Our tolerance for shabby service is going down. According to RightNow’s third annual Customer Experience Impact Report issued earlier this month, we expect more as we spend more carefully. They found that in 2008, a record high 87% of consumers stopped doing business with an organization after a bad customer experience, up from 68% in 2006. They also found that even in the current down economy, 58% of U.S. consumers say they will always or often pay more for a better customer experience.

What are the implications of rising customer expectations despite a tight U.S. economy? First, companies should think twice about cutting customer service. Second, they should look at who is getting high marks for customer service and understand what they are doing right. Last, they should look inward and evaluate what they can be doing better to meet rising customer expectations.

So, which brands get customer service right? In March 2007, Business Week published its first-ever ranking of 25 client-pleasing brands. The Top 5 on Business Week’s list include: USAA, Four Seasons, Cadillac, Nordstrom and Wegman’s. All those are commendable and expected.

More recent, interesting and revealing are the findings from the third annual National Retail Foundation-American Express Customer Service Survey conducted by BigResearch in January 2008. The survey of 8,800 consumers found L.L. Bean delivers the best customer service in all retail formats. Internet-only retailers Zappos.com, Amazon.com, and Overstock.com came in second, third and fourth. I haven’t purchased from L.L. Bean in years (preppie is not my look anymore and my kids aren’t into it, either), but am a fan of Zappos and Amazon, and customer service is a big part of why.

Zappos makes it easy and risk free to buy from them. By not charging extra for standard shipping (in either direction), they eliminate some of the biggest barriers to online shopping – the hassle, disappointment and cost of returns. When I’m unsure what size shoe I need, I buy two pairs. That way, I get the right size, I get a return postage-paid envelope and all I have to do is drop the extra pair in the mail and wait for the refund to hit my credit card. And, they do surprise free shipping upgrades.

CEO Tony Hsieh tells customer service stories that rival the urban legend about Nordstrom allowing a customer to return tires (which the store never sold). One story is about a customer who was traveling on business and didn’t know where to call to have pizza delivered to his room. He called Zappos and asked for help. The Zappos customer service rep got the necessary information, placed the order and had the pizza delivered. Of the company’s 10 core values, #1 is: Deliver WOW through service.” And they do!

And Amazon is a definite favorite in our house. The site is fast and easy to use, and they have an ever-expanding assortment to choose from. Because we buy so much from them, all our shipments are upgraded to next day at no extra charge. This week’s Sunday NY Times profiled Amazon’s long road to surpassing Ebay in market capitalization. “While E-Bay was buying into classified advertising, online payments and Internet telephony, Amazon spent hundreds of millions of dollars building its brand as a trusted retailer — hiring customer service representatives and returning money to customers when transactions went awry.”

Together, this data is a wake up call for retailers and others. The economy is tough and getting tougher, and brands known for great customer service should be better able to ride it out.

Secondary Ticket Sales - What An Experience!

Forrester recently estimated that US online secondary ticket sales will grow at a 12% CAGR over the next five years to $4.5 billion by 2012. That’s a lot of tickets! Now, my family is a baseball family. We have season’s tickets, which entitles us to 81 home games a year – far more than even our baseball-crazed household can attend. As a result, I’ve had personal experience with several different ways of selling tickets to total strangers. Here’s my take on the options.

E-Bay wins hands-down. And I don’t mean Stub Hub, which was acquired by E-Bay. I mean good, old-fashioned E-Bay. (Has E-Bay ever been described as "old-fashioned" before?) Nothing can beat it for ease of use, intuitiveness of processes and tools, and success rates!

Stub Hub is in a word … lousy. It’s hard to use, their seller notification doesn’t seem to work nor does their tool for tracking action on your listings. We don’t know why Major League Baseball chose them as their one and only sanctioned means of reselling tickets. From the cheap seats, we think it's a good thing for E-Bay to keep its brand separate from Stub Hub.

Craigslist is such a mess, I have never tried to sell tickets (or anything else) there. I keep looking at it, and wondering how anyone sells anything there given how disorganized it is. Craigslist sellers, please tell me how you do it!

There’s always person-to-person sales outside the venue. That’s become harder to do as cities have cracked down on scalping. I do get a kick out of haggling with the scaplers themselves – you know, the guys who stand on street corners and are both buying and selling tickets to an event. They are a hoot, and they’re business people, like the rest of us. They have the seating plan committed to memory and know the going rate for any seats at any time leading up to an event. I had to laugh when one of them didn’t like the below-face value price I was asking for 2 tickets and exclaimed “Lady, you’re scalping!” No duh.

So, for my money, when it comes to selling to strangers, it’s E-Bay all the way.