The Changing Canadian Shopper
On Monday November 3, 2014 we had the honour of attending the first ever Retail Spark with Google event! This was the first of three Retail Sparks organized by Google and the Retail Council of Canada, with dates following the initial Toronto kick-off in Montreal on November 5 and Vancouver on November 13. Each Retail Spark had panelists targeted and relevant to each geographic region who are – of course – leaders in the retail industry. Toronto’s group of presenters included; Sam Sebastian, Managing Director of Google Canada; Diane J. Brisebois, President and CEO of the Retail Council of Canada; Satish Kanwar, Director of Product at Shopify; Ben Burmaster, President and Co-Founder of Snuggle Bugz; James Connell, Vice-President of eCommerce and Marketing at Roots Canada Ltd. In addition to spending an afternoon with inspiring speakers Retail Spark held hands-on workshops for retailers to help facilitate and activate their businesses on Google Search, Maps, and Google + and with separate workshop for promoting your business on Google.
How Google Can Help Your Business
Sam Sebastian from Google Canada gave a great summation of the state of retail in Canada to prep the audience for the afternoon. Sam presented on a few different ideas that we’re been keen to in our research and work here at Demac Media. He also gave great tips and advice for business owners on how Google can help their retail business. Small and medium businesses (SMBs) help run this country, and with that point in mind Sam shared with us Google’s goal of raising the collective IQ of eCommerce, retail, and shopping in Canada in this ever-evolving digital age. Google is here to help strengthen the fabric of our local communities by bettering businesses with the services and resources they provide.
The New Way of Connecting with Consumers
Consumers are connecting with businesses well before they step foot in the door (that’s if you have a physical location)! Prospective customers are researching your business online in advance of making a purchasing decision (28%!), and Google wants to help you leverage this by providing you with information about the current state of retail and how their solutions will help. 56% of respondents to a survey said it’s harder to be a small business now than it was 10 years ago, but the good news here is that 1/3 of Canadians say they plan on shopping with independent retailers this Holiday season. Sam wants this number to be bigger though, and proposes that businesses use Google to help with growth. 2/3 of people surveyed don’t have an online presence at all! 4 in 10 independent retailers say they’ll actually be advertising online this holiday season…this means 60% are not. Here we can see a distinct gap, but remember there is a demand!
Why is this bad?
1. Competition is fierce!
2. You have to be found to get discovered.
3. Consumers are researching prices first.
4. The #1 source for gift inspiration is coming from online.
First moment of truth is now zero moment of truth
20 years ago Procter & Gamble created the “first moment of truth” concept in retail, which referred to the 7 seconds a customer stood in a grocery aisle and formed their opinion. This was when all the marketing a company put into a product would climax to a buying decision. With the advent and rise of of web usage we’ve seen, in the last 5 years, a shift to now a zero moment of truth! This means that the most influential time to win a customer is before they get to your store.
Win customers online with these core techniques:
1. Have the right FREE presence online. 85% of all Canadians are online and 93% of them look for services and products via search engines, so claim your business listing!
2. Start early. Search trends have already started, as Google logs data in advance of the Holiday shopping season. You still have time, but get going!
3. Have a basic web presence. Let the world find you online by having a website. Having all the bells and whistles is not necessary, keep it basic for now.
4. Then get fancy. You can do so with mobile capabilities, special promotions, social networking, etc.
Google wants to help demystify the online world for retailers and merchants. The training and tools are available to you, but remember to have fun with it too!
Growing eCommerce in Canada with Shopify
Shopify’s Director of Product, Satish Kanwar joined us for the afternoon and brought with him some intriguing statistics on the current state of Canadian eCommerce as well as the projected future of the industry.
eCommerce in Canada
Satish brought his wealth of knowledge and industry insight to Retail Spark on Monday, presenting to us right off the bat some staggering Canadian eCommerce statistics. We live in a digital age, yet less than half of Canadian business have an online presence, specifically only 46%! Shopify reports that sales by Canadian businesses have been growing at a rapid pace, but 64% of that growth is attributed to larger enterprises. This is due to the fact that these companies have invested the money on the necessary resources.
Customer behaviour is also changing at a rapid pace with the changes we’re seeing in technology. Customers are now approaching retailers and their online store as one entire entity, rather than separate component parts. At this moment a customer could be scanning your store on their phone while standing in your store, or at the very least expecting to have the option of doing so. Once upon a time consumers would predictably visit either your physical store or your online store, but now they want both. Expectations have risen when it comes to the merchant-consumer relationship, and technology facilitates this.
You need to be providing people the option to learn, try, and buy! The question right now is not where money is being exchanged, it’s where customers are making their decisions. Mentioned previously by Sam Sebastian of Google, people are making decisions before they even visit your physical location. Shopify reports that in August of this year they saw a greater share of traffic come from mobile than desktop device, 50.3% mobile vs 49.7% desktop. You need to be prepared as a retailer to extend your services across many different devices, at any given time.
No platform is a silver bullet, you need to find the right mix for your business. The best way to create value is to point them to the right place where they can learn more while experiencing your product(s) in a better way. Find your channel, and point back to your web presence to leverage the value of the messages you create, rather than being stuck with the experience of, say – 140 characters. You want high impact!
Picture retail as a simple triangle composed of: distribution, value, and experience. Previously the only time a customer could purchase from you was when they were in your store. The advent of department stores helped produce retail traffic, with bringing traffic to local areas at an affordable cost. Now eCommerce is here to help in the new era of retailing, by bringing the power back to local (smaller merchants) the ability to sell online allows one to compete based on experience and value.
The Democratization of the Value Chain:
1. Unique Selection – you’re the expert
2. Unique Merchandise – you’ve made something
3. Unique Pricing – you’ve offered timely offers
4. Unique Experience – there’s something about your brand/message
It is easier than ever for merchants to operate. With eCommerce, costs are lowered and not at the sacrifice of time and energy. The opportunity online is there for you!
Snuggle-Up with eCommerce
“I’m here because I’m you, or was you” – Ben Burmaster
Ben Burmaster, CEO and Co-Founder of Snuggle Bugz and proud Demac client, spoke next about his experiences in the current retail landscape. First founded as a small business in 2006, Snuggle Bugz is a shining example of the kind of success small and medium Canadian retailers can achieve. Ben with candor touched on the struggles, failures, and lessons his company faced along the way, and how with the help of Google they have become the fastest growing Canadian retailer.
Opening first as a bricks and mortar retailer of baby gear catering to mothers and fathers, especially first-time parents, Snuggle Bugz hit some snags. Their business model presented a unique situation, as their customer base lasts for a very short period of time. What Snuggle Bugz found is that they needed to be able to acquire customers within a very short window of opportunity and sell to them before they’re gone. When they first launched their website Ben admits to making some mistakes, including; picking the wrong vendor, not dedicating resources to eCommerce, and trying to run their eCommerce operations from within a retail store. Ben became more involved in the business by focusing on growing eCommerce. They set budgets, dedicated inventory and staff, and found a new provider (Demac Media). Today they have 5 retail locations made up of three retail brands: Snuggle Bugz, Baby’s World (West Coast distribution), and Nestled (baby furniture). In 2013 the company became what Ben affectionately refers to as “Team Snuggle Bugz”. Here are Ben’s main challenges, failures, and lessons from along the way:
1. Online vs Traditional Retail:
- In 2009 Snuggle Bugz made eCommerce the priority, but it became a battle within the organization.
- Between 2011 and 2012 revenue increased by 1,000% but traditional retail suffered, customer experience suffered, customers didn’t want just online or just in store – they wanted it all.
- In 2013 they became “Team Snuggle Bugz”.
- Now it’s not about eCommerce or in-store it’s now about “commerce”.
2. Customer Focus as a Main Priority:
- In 2013 the customer became the priority.
- Snuggle Bugz focused on the customer experience.
- Not just online or in-store, but for everything – for baby gear period.
3. Stop Saying “No” to Your Customers:
- Snuggle Bugz found a disconnect between them and their valued customers.
- Delivering on what the customer wants became the key to their success.
- They then discovered omnichannel, and did things like implement buy in store and ship from warehouse strategies, and saw significant growth because of this.
4. Content is King:
- Become experts in what you do!
- Snuggle Bugz became the experts in all things baby.
- You will be found online if you make yourself searchable (ie. blogging).
- Google loves good content!
How Did Google Influence Snuggle Bugz?:
1. Google AdWords: Is a huge part of their business, since they started with it in 2007. What they find is that it’s simple to use, and what works best for them is the simple aspects to Google Ad words like simple text ads, which get the best ROI for them. AdWords drives 15-20% of their monthly website traffic and can be targeted locally to creates traffic for retail stores.
2. Google Analytics: A free tool for analyzing website trends, finding areas of improvements, and key search metrics from your customers. If you don’t have it set up, GO DO IT NOW. You can see what people are searching for, find problem areas, and track key metrics. For example, Snuggle Bugz found search terms like “diaper bags” that had really low conversion rates, and then worked on product offering and content to help increase sales.
3. Google+ / Google My Business: Free tool that features your business listing in Google organic search. If you don’t have this, again like Analytics, Ben says “Go get it now!”
4. Google Organic Search: If you make great content, Google organic search will pick up on that. 45%-50% of Snuggle Bugz’s traffic comes from organic search alone!
Omnichannel and eCommerce are not Trends for Roots Canada
James Connell, VP of eCommerce & Marketing at Roots Canada took the the stage a Retail Spark with Google that afternoon to touch on the rise of eCommerce, and with it Omnichannel. Roots Canada would reiterates that no matter the size of your retail business, both omnichannel and eCommerce are here to stay, and we need to push Canadian businesses to get involved and engaged with both. Emotion is starting to gain momentum with all social collateral being produced online. When people are trying to build events/experiences, it’s all about the emotion and the different aspects of the event/experience that separates it from other similar events.
Emotion and Convenience Economy
Online advertising and buying caters to emotion. If you can build both emotion and convenience into your business you will move forward and experience growth. Roots Canada is also seeing the huge shift we’ve reported on from tradition desktop usage. According to their statistics: desktop was 72% of sales/visits in 2013, and now it’s 45% in 2014. The attraction to emotional triggers and convenience in the retail world is accelerating quickly. Customers are now browsing your store on their mobile device, while shopping in your store. Technically in this newer unique situation, customers now have more product knowledge than sales associates, as your store’s representatives don’t have devices on them. This is no longer a question of customer service, but also digital literary. James emphasized the point that in their data they could not find an “average customer”, unlike the common thought that these new currents are thanks to Millennials shopping online. James reiterated, “this is about everybody!”.
The market is shifting considerably:
- Traditional competitors
- Online only competitors
- Technology companies
- Social media
Remember you don’t have to be everywhere at all times! You should be open to taking risks with your business, but also aware of who you are communicating with and through what channels to achieve a great ROI. Even if you are stuck in the mind set that your business isn’t online, remember that it is. If you aren’t engaging on social media then you aren’t dealing with reputable management. When your customers search for you online they should be able to find something, that’s why it’s crucial for you to participate! Even if it is within your local market, i.e. Yelp. In terms of omnichannel strategy, Roots launched a service for customers to buy online and pick up in-store, thus directly catering to their local markets and offering a transaction of that is convenient for customers, which will in-turn instill emotion within the buying process. The final strategy that Roots is moving towards is “Commerce Areas”, wherein they judges stores based upon geographic performance – social impact, and customer service within a radius around the store – in addition to the traditional financial performance metrics.
- 1. Blend the online and in-store experience in every way possible.
- 2. Develop a culture of service by using tools to understand what customers think, and how they interact to maximize your ROI.
- 3. Then focus on opportunities and tools that matter to your customer!
Q&A with The Experts, with Diane J. Brisebois, President and CEO of The Retail Council of Canada
“We are a unique small boutique retailer, and don’t want to sell online. How can we still be relevant with reference to the internet?”
Answered by: Sam Sebastian, Google Canada
I want to better understand why you don’t want to sell online. I think you need to engage there, because it’s the whole store experience. Selling online is an additive. Number one: argue selling online. Assuming you don’t go in that direction, the conversation about your brand is happening online, whether or not you want to engage in that conversation or not. For example: social media reaction or making sure you’re discoverable in search engines, social sites,etc. You have an obligation to the whole customer experience around your store, even if you don’t have the operational ability for eCommerce. It’s your responsibility to satisfy your customers. It’s the new normal to sell online, and now you really don’t have a choice. The sooner the better, and it’s a journey! Start with the easy things, then over time build in the bigger tools.
“How can I build brand awareness and a business online at the same time. Which one comes first?”
Answered by: James Connell, Roots Canada
It’s simultaneous. It is eCommerce enabled, it’s something that your customer experience is at any point where the customer touches you, like Facebook, Twitter, etc. You have to start somewhere, and as soon as you go online with your website you’re building a business!
“What is the simple most important key to content with an eCommerce site that drives traffic?”
Answered by: Satish Kanwar, Shopify
The key is to become an expert on the topic or problems area you’re selling and not your products themselves. When you’re reaching out to customers with problems, and they’re learning about the category, or solving a problem. If you invest in this way, you’ll get referral traffic, or people who are willing to share your content that are similar profile buyers. For example, Luxy Hair – they do a ton of tutorials on how to do your hair, using their products. However, they focus more on actually doing their hair, not really on selling the products.
“Given your experience as a retailer with a strong eCommerce presence, what’s the best way to quantify web traffic to in-store traffic?”
Answered by: Ben Burmaster, Snuggle Bugz
We all would love to have a predictive model on how the two work together, but it’s not that straight forward. There are correlations between online and offline, for example, when there’s a sale going on, or running something digitally they see increased foot traffic. Or promoting a daily deal and the online channel sells out, but in-store still has it, then in 2 hours stores will also be cleared out. They’re doing a lot more dg-deep analysis by taking all of their web analytics and bringing their Point-of_Sale data and mining that to find more commonalities, therefore learning how to better serve their customers. Their retail businesses are definitely more profitable than their online business. It takes a lot of energy and cost to run an online business, and it’s costly at a large scaleWith Snuggle Bugz they’re trying to figure out how to get the customer in the store, because they still believe it’s better for them to be in the store to feel the passion. Snuggle Bugz likes to push people into their retail stores.
“What are some of the up coming trends with fashion based online retailers, and what can I learn from them?”
Answered by: James Connell, Roots Canada
Focus on content marketing. Companies like Net-a-Porter, and GotStyle, there’s a lot of content that pushes even further and closer to a real world customer experience through content, online. this content in conjunction with he ability to personalize the content that you can show online, and the merchandise that you can show to a consumer. For example, Roots is testing how they will show different merchandise to people in Australia or Canada or LA, they’re trying to build a one-to-one relevant experience on their website and online channels. It’s all about relevance and convenience. It’s not convenient as a guy in Toronto and see shorts in the winter for women, but if he’s able to go and see his past purchase history, depending on his location and climate, they can then deliver a pretty accurate picture of what this consumer would buy, and click-through rates can be really high. After that, it’s about product; as a small business owner. Doing personalized products, that is custom, and unique, for the consumer is something that can really drive sales, branding and the uptake of your online business (ie. Signed Drake Roots Jackets).
“Can you name some merchants that you see doing an amazing job, in brick and mortar, online, or as an omni channel experience?”
Answered by: Ben Burmaster, Snuggle Bugz
Ben spends a lot of time looking at people who have similar customers, he likes to look at local retailers. One he looks up to a lot, and reached out to build a relationship with them is Mastermind Toys. They basically started as a small little shop, and how they’ve built it up, it was about customer experience, and as they scaled the business they’ve focused a lot on digital, video etc. They created personalities within their company and within the video that have been incredibly successful to both their online and offline channels.
Answered by: Sam Sebastien, Google Canada
Large retailers who are recognizing their need to transition or change, Google works closely with Canadian Tire. They’re trying to figure out how to have a more interactive flyer online. When you get these big companies that are willing to change in a traditional space, that’s where progress comes in. With President’s Choice – they are using customer insights. Google is using a dashboard, and using searches across Canada for food trends, and they’ll build content on those trends, for what people are searching on a day-to-day basis. Whether or not they have a product within their brand that will relate, they want to attack the trends head on.
Frank & Oak – born through online. Google went through their operations, and they’re building everything within their four walls, their distribution, models, designs etc. What Frank & Oak does is that they’re nimble, and can turn on a dime, they can spot a trend on their site with consumers and very quickly move to that trend because they do everything themselves. They’re using consumer insights to grow!
“If a merchant begins their business online, should they get into the physical world as well (ie. a bricks and mortar location)? Have there been merchants who have transitioned to physical well?”
Answered by: Satish Kanwar, Shopify
Complementing your online store, with an in-person event experience is really powerful. It’s an opportunity to introduce your products to customers that might be more hesitant. If you’re willing to invest, it’s worth it to introduce your products into new geographies, and build and expose your products to local influencers. Retailers do pop up experiences for existing customers only – great way to reward people who have been loyal! Great way to develop a strong offline experience too. Getting more people involved with the brand, has become very easy and popular. Use to be that rental space is difficult, as there are specifically dedicated pop up locations for merchants to use!
All in all, we considered the first ever Retail Spark a win for Google, the Retail Council of Canada, and for all the retailers who came to participate. We hope that more events similar to this one pop-up globally to continue the frank discussions surrounding the eCommerce industry and the evolution of how business and technology are changing. The experts brought up important points about what we’re seeing with eCommerce and Canadian retail as a whole. One of the main patterns we’re seeing and reporting in our statistics is the rapid shift towards mobile. This not only changing the how and where of shopping habits, but also influencing and revamping the overall shopping experience that retailers can, and should be, providing for their customers, online and offline.
Small and medium businesses are hesitant to adapt to the digital age, for fear of over-complicating things, stretching themselves thin, or lack of financial resources. None of this need be the case though. What businesses need to actually be worried about is whether or not your store is online…your store is still online. Own the space you have online, because as Sam Sebastian from Google iterates, you need to make yourself searchable to be found! This all goes back to the concept of customer experience, once you own your space online, prove your value by – as Satish from Shopify said – becoming an expert, and leverage the emotion tied to the buying process, you will be driving sales (and repeat sales) with minimal energy!
Take advantage of all that is available to you, especially with the tools and solutions that Google provides business. Ben Burmaster and his business, Snuggle Bugz, is the perfect example of how you as a small business owner can optimize your performance online and offline, with the help of Google. Don’t let yourself get left behind in the dust then bemoan the fact that there’s nothing more you can do to compete in the world of eCommerce and omnichannel. The resources are there and the conversation has been sparked! We’re excited to see the Canadian retail landscape adapt and evolve in the coming years.