Nov 12, 2007

Internet Shopping and Improved Customer Experiences

There are growing signs that U.S. retailing is continuing its move from an era focused tightly on driving out inefficiencies in supply chains, reducing costs, and delivering environments offering low prices to a new era of benefits-based business models. Early evidence from private conversations and public retailer reports suggest the new era is gaining steam as new formats and vendor relationships start to take hold. The new era of "improved customer experiences" will introduce consumers to greater choices, improved decision-making, more expertise and assistance with solutions, and lifestyle-oriented national brands.

An interesting parallel development is happening on the web. Once viewed narrowly as simply a place to find lower prices, web retailing is moving quickly to stake out new ground. Locational convenience, ease of shopping, speed of transaction, breadth of assortment, and other attributes make web retailing 3.0 look strategically more attractive.

For example, according to a recent NYT article, Brookstone, the hardware and housewares retailer, said it would introduce technology this week allowing visitors to browse a three-dimensional representation of a Brookstone store, with fixtures and signs common to all of the chain’s roughly 300 locations. The 3-D store closely resembles what one might see in the Second Life simulated world (except a missed keystroke will not accidentally take you to a virtual S & M club while searching for a gift for dad).

As in Second Life, Brookstone’s 3-D store lets users move freely through an animated world. In the store, when shoppers pause in front of a product, an item description appears, along with a link to a checkout page. For now, that link brings customers to a checkout page on Amazon, with which Brookstone has a marketing partnership.

And online merchants are introducing revolutionary new search features meant to take even more pain out of the typical shopping experience. Barnes & Noble recently introduced a revamped Web site that is heavy with taped interviews with authors and other video features meant to replicate the bookstore experience. But for buyers, not browsers, a major change to the search function will help speed them through the store’s roughly one million book choices.

These moves by online retailing merchants will continue to put pressure on traditional brick & mortar chains to evolve the customer experience in their stores as well. Expect some fascinating new retail developments over the next five to ten years.

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