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20 Aug 2011

The War For Your Wallet

by Kevin Labick

I used to play tennis in college and I still think of myself as a competitive player (even though I’m really not).  I’ve worn down my sneakers and it’s time to get a new pair.  I decided on the Nike Lunar Vapor 8s. They’re light-weight, good looking and have the right level of support.  I google them and start searching for deals.

That’s when all hell breaks loose.

Zappos and Amazon are my go to online stores for shoes. They have the selection and browsing tools that can get me to my product the fastest and most importantly they have return policies that eliminate any anxiety about getting stuck with something that doesn’t fit. But Nike.com has the experience. There’s a video of their footwear director explaining the design theory behind the shoe. There’s pictures of Federer everywhere to get me pumped to hit the courts (I didn’t even know he wore these bad boys). The reviews sound like they are coming from real players. And face it, the site is just plain cool. While I am thinking this through, a Facebook friend shoots me an offer from Groupon for 20% off any shoe from Tennis Warehouse provided I buy before 3pm Wednesday. I look at my calendar and I’m reminded I have a match Thursday night. I’d like to have the shoes by then and I’m pretty sure (but not positive) The Sports Authority near my house will have them in stock. Maybe I should just risk it and try to pick them up tonight…

 

 

My personal story illustrates the latest war going on in retail. It’s being fought between four armies: the traditional retailer (Sports Authority), the manufacturer (Nike), the digital pure play (Zappos & Amazon) and the social seller (Groupon).

The question is: who will win?

Empathy Lab believes in the short term – with a commodity product like sneakers – the four “armies” will stalemate – and it will be the consumer who will make out the best as each seller pushes the boundaries of promotion and service in hopes of gaining a long term customer. In the end, we give the edge to the retailer provided they evolve into a true omni-channel player. If you think about it – there is nothing the others can do that they can’t -- provided they continue to grow their digital. But what they have and the others don’t are the physical stores and expertise in face-to-face customer contact. We think this contact and the option to go digital, social or physical (or more likely a blend of all three) based on customer preference will put the retailer in the command position.

What’s your opinion? Where will you buy your next pair of kicks and why? What do you see happening three years from now?

4 Comments

  1. 1 Simon 12 Sep

    I see the trend is that the larger retailers will also provide an in-store online experience, to provide the consumer the best of both worlds, customer service and expertise and the best deal. I worked part time for a local sports retailer and if we did not have the shoes in store or in the right size we were told to try and have them purchase the shoes online (on the stores website) with the incentive of no shipping costs. They had several computer kiosks set up to handle these online purchases.The ideas is to get the purchase anyway you can before the consumer leaves the store.

    The fact is more and more consumers come into the store after researching on-line first. Many times when I tell them we don't have the shoe they were looking for they would comment "well, you have it online". 

     

  2. 2 Simon 10 Sep

    As a part time sales associate at a local sports retailer I see this battle every shift. More consumers come into the store after doing their research online. They know what they want are are looking for price. If we don't have it in the store efforts to try to sell them another shoe is tough since they are so educated about the shoes. Our store is catching on too. If we don't have the shoe or the size we are instructed to try to get them to buy it online at the store, with the incentive of free shipping. We try to get the sale anyway we can. It very common now for people to look for a specific shoe and when I say we don't have it they say, "we'll you have it online!". I see this trend continuing with retailers using digital technology themselves as a way to offer the consumer the best of both worlds - personal service and customized fitting with finding a good deal online. 


  3. 3 Craig 27 Aug

    I agree with your conclusion in theory.  But in reality, I believe most retailers will fall far short of the pure plays in their embrace of digital tactics and technologies.  The reason the pure plays are so far ahead today is they didn't have legacy to overcome (political, cultural, operational).  It takes strong leadership to overcome the "but we've always done it this way" attitude and unfortunately, strong leaders are pretty rare...

  4. 4 Robin Baskin 24 Aug

    For me it depends on what my need is at that moment.  I just bought a new pair of running sneakers at a retail location that I was fitted for due to particular stabilization needs. I later found them online for half the price and with free shipping. The fit part was complicated and required knowlegeable in store sales associates. However, now that I know what brand and model I need I can source the cheapest retailer and hopefully score that free shipping. 

    Consumers continue to get more savvy about how to leverage the internet.  Whether its discounts, free shipping or free returns, they're looking for anything that will maintain the online convenience while minimizing the risk of not buying it in person.

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