Commentary

Retail is Only the Last Mile

"Is that your best price?" I asked the salesman of the price he had just quoted me on the shiny new Toshiba notebook. The salesman asked me to wait for a few minutes while he ran some numbers on the computer and talked to his sales manager. Within a few minutes, I had the price I wanted and I completed the sale.

The salesman never had a chance. I had done a lot of research online to determine what I wanted to buy to replace my aging laptop. I visited the sites of the various computer manufacturers to find out which model best fit my needs. Over time, I narrowed my search to three specific models. From there, a bit more research using Froogle and a few other search products helped me find the best possible price on the model that best fit my needs. Before walking into the retail store, I knew exactly what I wanted and exactly what I was willing to pay for it.

Meanwhile, the salesperson who helped me with my computer purchase thought I was just browsing after walking in off the street. He had no idea that I had such detailed information at the ready. In the end, I walked out of the store with the notebook I wanted at the price I wanted. If the retail store made money from my purchase, I would be surprised. I easily saved several hundred dollars.

This consumer behavior is quite common across a number of different product categories, particularly consumer electronics, automotive and real estate. The consideration battle is fought and decided on the Internet, not at retail. Consumers are moving all the way through the purchase funnel online, leaving the last step - the purchase itself - for the brick-and-mortar retail channel.

Yet clicks and the occasional awareness study seem to be the dominant success metrics for online campaigns in these high consideration categories. Does this seem strange to you?

In addition to spending more money in online advertising and marketing, high consideration product manufacturers should be measuring their share of the consideration set. For instance, GM should be measuring the effects of their online advertising on how the Chevy Avalanche is considered against its closest competitors in the truck category. Showing a consistent lift in how the Avalanche fares against its competition, both in consideration and in overall purchasing, should be a goal of any online ad campaigns.

Knowing that a good percentage of the category's purchase decision-making happens online should bring about a radical change in messaging. High consideration categories should shift to differentiation-based messaging designed to show advantages over competitors. It would also help to focus on the qualitative aspects of high-consideration products, to help fight increased commodification and price sensitivity.

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