Are Your Employees Building Up Your Online Store While Sabotaging Your Margins?
By Bob Phibbs
A lot of attention is being given to how online retail is growing. But what if that growth isn't coming entirely from consumer demand, but employees teaching shoppers how to game the system?
My buddy Matt, who really liked Pottery Barn furniture, was redoing a second bedroom. He went to the store to buy all of the furniture for it and when he approached a helpful Millennial employee, she taught him how to game the system.
She told Matt to go to the Pottery Barn site and add a few items to his cart and wait. “A coupon will arrive for 20% off. But don’t do anything with it. Wait for the right offer.”
He was to add some more product, close out his computer and wait. Sure enough, two days later an email arrived offering 25% off. He remembered not to do anything and wait. He received a 30% off + free shipping coupon a week later.
The brand lost margin.
The employee lost a sale...
Sheila, another friend, when looking to purchase a $1500 chandelier from another brick and mortar store, was told something similar by another young salesperson. She was told to put the fixture in her online cart and close out.
She was told to keep checking back to see if the price went down or until she received a coupon. She purchased the chandelier last month for half off the original price – again with free shipping.
Why would Millennials employees give away the profit by doing something like that?
Because they are frugal and are drawn to savvy ways to save money.
What is happening is no less than the rewiring of how people buy. But also the seeds of a new culture.
And on top of all this, UJET published a survey recently that shows that 24% of Millennials admit to having falsely reported an unpleasant experience to a customer service department with the expectation of receiving a discount or coupon.
It seems Millennials are willing to do whatever it takes to get a cheaper price.
Ralph Jacobson, Global Retail Strategist, IBM on a Retailwire discussion about the survey agrees. He wrote, “As the biggest proponent of ensuring marketers don’t lump all Millennials together, I can say, though, that this is one emerging aspect that a seeming majority of shoppers in that age group exhibit consistently. I certainly don’t want to accuse all Millennials of wanting something for nothing, however these and other survey data show some troubling findings.”
So what’s the answer?
At its core, there has to be a fundamental education of retail employees, regardless of their age. Their job on the sales floor is not to find ways for their shoppers to game your system; it is their job to sell the products at the in-store price.
A foundation of how exactly to execute a branded shopping experience must be taught with time to practice and role-play.
Beyond that, managers must inspect what they expect and know what their employees are actually saying to shoppers.
And those marketing managers who have created those online incentives that take people from your store to your site need to stop patting themselves on the back for how smart they are.
Those offers are not only taking away your profits but they are teaching your current brick and mortar shoppers to bypass your store and game the system on your website.
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