How does Best Buy look at its various distribution channels?
Mike Vitelli, Best Buy:
We have dot-com and then there’s bricks, but consumers are in this kind of multichannel life. They don’t call it that — they just live it. It starts with my phone, and then I’m on my tablet, and now I’m on my computer, and then I go into the store. My expectation is that all of that is kind of integrated.
So here we are with stores and the dot-com site, and now a phone app. We try to make sure that those are all working together. If you [online] guys started opening up stores, you’d say, “How am I going to make that experience the same that they’re seeing online?” And it has to be the same. You want to have the same customer experience and the same feeling. That’s the expectation that a consumer has.
Do you have an idealized ratio of brick-toonline sales?
No. We’re working on the technicalities and the share percentages of it. Traffic and transactions really have changed a little bit with our store patterns. We had tremendous growth on
, and that translates in some cases to business picking up in the store. During the course of the year, 40 percent of purchases on
are picked up at the store, and that rapidly increases during the holidays. But it’s all one experience for the consumer. They can start in the store and leave and then do research, and then come back or buy it on their phone.
Noah Herschman, eBay:
Anytime, anywhere, anyhow.
Nationwide has also upped the e-commerce ante for independent dealers with new programs and more enhanced platforms.
Jeannette Howe, Specialty Electronics Nationwide (SEN):
We’re very active in this field. We hired Frank Sandtner a couple of years ago from AOL, and he has really expanded the offering for our dealers. We have three Internet providers that can help our dealers build websites, we have catalogs for them and we are also doing courses at our next PrimeTime event on how to use QR codes in an effective manner.
There are some challenges in the manufacturing community because some feel that their distribution online is very mature. Trying to convince them that a smaller dealer should be able to play in that game as well is challenging at times. But we are working to help our dealers be able to sell online.
We’re also working with Noah here on the Milo initiative because we do think that if someone is on their phone, we want to be able to have them go to a local store and be able to purchase something.
Milo is a company that eBay purchased a year ago. It uses your global IP address, whether on your computer or your mobile device, and live inventory feeds, to determine where the closest in-stock product is and at what price in a brick-and-mortar store that’s near you. Best Buy is also one of our partners.
Our goal for the most part is to drive business to the stores, particularly if you’re offering custom installation or if you’re selling something like a mattress — doing that online is challenging. You do want the customer to be able to come in and have the touch-and-feel experience.
It also depends on the customer. A lot of customers want to shop in a store — they want to be able to look and touch and feel the product, and they want it right now. They don’t want to wait around for it.
But you really need a mix of both online and offline. As we said, retailers need to be able to cater to the customer however they want to shop, anytime, anywhere. We also need to make sure that retailers who sell on eBay remain healthy both online and offline. That’s why we offer offline products like X.Commerce, Magento and Milo.
Dave Workman, PRO Group:
We’re probably known as much as anything as a brick-and-click group — we have a lot of core competencies around the web. Our goal is to do everything possible to bring the brick-and-mortar experience online.
In many cases, the challenge these guys have is visibility as differentiated, promoting, value-added specialty retailers. eBay is known for aggregating enthusiasts around categories, and our new partnership [see TWICE, Jan. 10, p. 12] is going to provide our dealers an opportunity to gain more eyeballs. We’re very excited about it. It’s a very important and strategic partnership that will help our dealers going forward.
Yes, we are very interested in the enthusiast customers, and when we look at the people who are really providing excellent service online, PRO Group is right up there at the top in terms of their ability to ship, to have the product in stock, to handle returns, to be competitive in the marketplace, and to provide tremendous after-sale customer service. It really is a great way for us to be able to offer those kinds of benefits to eBay customers.
For us it’s not really about the eBay brand itself. We’re just a marketplace, and what we want to do is connect the buyer with the seller at the right time for the right product.
It’s interesting because in many respects we as a group are evolving toward how that balance of brick-and-mortar and web works in the marketplace, and what each of those sides of the ledger do best. In spite of some of the difficulties, this is actually a very exciting time for our group moving forward.
Rob, do you have to continually build out your e-commerce capabilities to keep up with online growth?
Rob Eby, D&H Distributing:
We’re certainly growing that part of the business, and keeping up with that is always a challenge. We constantly have to look at our warehousing facilities. We just built a brand-new mezzanine in our Harrisburg [Pa.] warehouse. Instead of building out, we built up to create more space because we’re always adding new items and new products based on the demand of our customer base. We’re normally at around 45,000 or 50,000 different items that we have out there for customers.
Also, being able to execute in timely manner is very important too because when a customer gives you an order, they expect it to go out that same day.