The Clyde platform was created to meet the needs of eCommerce companies. To stay abreast of the latest trends and developments within the space, we’ve invested time and resources to remain well read on the subjects that matter most to our customers. Check in on this weekly “conversation” to read, watch and listen to stories that are shaping the eCommerce industry.
Bundling Benefits With Elite Customer Service
One of the buzzwords dominating the world of eCommerce this fall has been “skimpflation.” Greg Rosalsky, a co-host of NPR’s “Planet Money,” offered a straightforward explanation of the phenomenon. “It's when, instead of simply raising prices, companies skimp on the goods and services they provide,” wrote Rosalsky last month.
But the tactic isn’t just about companies lining their pockets, in a lot of ways it boils down to economic survival. “Skimping has a derogatory connotation, and, we should note, not all companies are Cruella de Vil or Scrooge McDuck. Many businesses, especially small businesses, are struggling to cope with surging costs and pandemic-related expenses. They're having a hard time finding workers at the wages they used to pay. And some businesses may be unable to afford paying what it takes to recruit workers in the current environment,” wrote Rosalsky.
Companies of all sizes feel stuck between a rock and a hard place. Either your margins take a haircut or you pass down those rising costs to customers. But there’s a third option on the table currently being explored by a Big Box retailer.
Best Buy is attempting to address customer services issues by offering a new “Totaltech” membership. This offering lets the user access Geek Squad support 24×7. They can use the members-only prices, two years of product protection, standard installation, and free delivery. This is accomplishing three things for Best Buy. The first is that it’s funding a dedicated customer support wing of its business. The second is that it’s serving as an effective outreach tool. Exclusive sales, early access and customized experiences are all embedded within this membership, tactics that have proven to be effective when attempting to increase AOV. And finally, despite the $199.99 price tag, this program has the potential to build brand loyalty as other companies raise the white flag in the customer support department.
Peter Keith, a Piper Sandler analyst, is optimistic about the new program . He believes that it will be a “potential game-changer” for the industry. His recent analysis said that the company would likely create a 3% boost in sales right away, with a 5-8 percent boost in earnings on the horizon in the next one to two years.
Small Business Attempt A New Balancing Act
Big-box retailers like Home Depot, Target and Walmart made it clear to investors last week that they were well stocked and ready to go for the holiday push. And while it remains to be seen if that is 100% accurate, small and medium sized businesses are not in the same boat. These retailers and businesses are fighting off inflation and supply chain issues that are currently packing a real punch. Many are having to balance price increases that won’t alienate customers with creative solutions in order to protect their bottom line. They’re doing things like slimming down selections, cutting hours or adding storage space. For more on this topic, have a listen to "Marketplace" hosted by Kai Ryssdal. The award-winning podcast takes you beyond the numbers, bringing you context. Their team of reporters from all over the world speak with CEOs, policymakers and regular people just trying to get by.
Experiential Stocking Stuffers
About 43% of consumers plan to redirect their spending to experiences and service gifts this holiday season, according to a holiday shopping survey of roughly 1,500 U.S. consumers in August by consulting firm Accenture. That is even higher among younger generations, with 53% of millennials and 50% of Gen Z saying they are redirecting to more experiential spending, the survey found.
“There’s a pent-up need to get the heck out,” said Jill Standish, head of Accenture’s retail industry group.
And it's not just the research team at Accenture that has spotted this trend. According to a study by the Harris Group, 72% of millennials would rather open their wallets for experiences rather than products.
Interested in learning how you can incorporate experiences into your product line? Here's a seven step guide from VendHQ that can get you headed in the right direction. Spoiler alert: it starts with something we've been championing for months (Pop-Ups! ).
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