Has the Web Come To its Senses Yet?

As high-flying online retailers like Amazon, CD Now, Toysmart.com and Peapod hit a wall, the e-commerce vision has come significantly out of focus. While caution among investors is a major factor, another important point cannot be overlooked: "pure-play" Web merchants are less likely to be profitable than the online arm of an existing catalog merchant. While brand, distribution and fulfillment help determine retail success, another not-so-obvious factor is at play: the role of sensory stimuli in retail success.

Retail is a tough business. Seemingly, anyone can place merchandise on shelves and swing the doors open. The trick is to turn a visitor through those doors into a purchaser, which is virtually impossible if the sales environment is devoid of the requisite sensory cues that promote shopping behavior. A successful offline retailer satisfies this requirement across all sensory modalities: sight, sound, feel, taste and smell. That places the Web-only retailer at a distinct disadvantage, though not an insurmountable one.

Having said this, I wonder if some online retailers have already thrown in the towel. Just the other day I heard a radio ad for an online grocer that nearly made me drive off the road. The message: shoppers who visit the supermarket can waste a lot of money filling up their cart with purchases they had not planned on. By staying home and using this online grocer, a shopper can resist these impulse purchases. Did I hear this right? A grocer buys advertising to encourage shoppers to not buy items? I guess the Web really has changed everything.

The goal of a retail strategy is to create additional sales on highly profitable products that are unplanned by the consumer--"impulse buying." A bakery that combines the aroma of pastries and coffee with visually rich displays is more likely to see a larger average transaction, as additional items like coffee beans, breads and specialty sauces are tossed onto the counter for purchase.

Call it sensory selling: the combination of visual, olfactory, auditory, taste and tactile stimuli that promote purchase behavior. Take the typical coffee shop, where whole beans are subjected to a series of smell tests before their purchase. Now translate that to the Web: a picture of a coffee bean may stimulate interest, but does little to advance purchase behavior.

Offline retailers view their role in the customer relationship as both providing and recommending goods and products. Leveraging this relationship to greatest advantage takes the form of cross merchandising, where a complementary purchase is positioned for sensory effect. Standing in line at a Gap retail outlet one can reach for perfumes and accessories that provide tactile and olfactory stimuli cues. Try buying the Gap line of perfumes over the Internet and you are out of luck. On its own, a link to a product recommendation cannot fill this role.

Unfortunately, sensory selling tactics on the Web provide only two avenues of opportunity: sight and sound, primarily the former, Missing are smell, touch and taste. This often leads the Web retailer to combat sensory deficiencies by promoting "flat" behaviors: buy less, save time, shop when you want. But as the capital used to subsidize lower prices offered by e-tailers dries up, the customer value bloom appears to be off the rose.

This does not have to be the case. Web retailers have a unique opportunity to leverage sensory selling techniques to build on their unique relationship with the customer. While online customer communities are mediated by technology the need to create a sensory experience that both responds to and promotes impulsive behavior through sensory cues appears to be overlooked by most e-tailers.

That's reflected in the ranks of the most popular items purchased online: books (purchased by 26% of Internet users in 1999), music products (24%) and software (18%), according to a study by my firm in June. These categories tend to reinforce a visual/tactile relationship between item and purchase. Noticeably missing from the list are categories that depend on the other senses to support purchase behavior. I don't need to smell a book or plane ticket to motivate my purchase decision.

Now let's consider Boston's Jordan's Furniture, a case study in sensory selling. Most of their 30,000-plus-square-foot stores offer a rich sensory experience of sights, sounds, even tastes and smell. The furniture shopping experience is as important as product selection under their model.

Jordan's should not be confused as an "experience economy" retailer, as defined by business author Joseph Pine. Experience-based marketing assumes that people will accept substandard quality for a lively experience (e.g., Planet Hollywood). Jordan's knows that entertainment is an adjunct to the shopping experience, not a replacement. The stimuli created by Dixieland bands, motion odyssey rides and themed furniture displays promote purchase behavior by creating a feeling of excitement. When buying a sofa, the feel of the cushions is supported by lighting, scent and environmental cues that are difficult to replicate if you are Furniture.com.

Not to be overlooked is the role that service plays in creating a sensory selling environment. The purchase relationship is based on trust, and the surest pathway to confidence for consumers is the support they receive throughout the purchase experience. Catalog retailer Lands' End found this out the hard way In an attempt to push more sales online, the company scaled back its catalog mailings during the holiday season and saw sales drop 8%.

The Lands' End experience should not be lost on any direct merchant. Customers have expectations based on experience and they expect you to act accordingly In this case, the connection between customer and company--the phone line--was cut. As a result, the push to e-commerce had a corrosive effect on the company's promotional and service efforts. Even though Lands' End enjoys state-of-the-art customer contact features via the Internet, the convenience of online shopping will seldom offset the need for human contact in key retail categories.

Mind share is the pathway to market share. In the case of Web retailing, though, owning the territory of the mind becomes even more complex as visual and auditory illusions are created. In the classic definition of illusion, the brain fills in incomplete images to create a whole, according to the assumptions it creates; a gestalt if you will, where the sum of the parts make a whole buying experience. Until PCs come loaded with olfactory cards, the Web retailer must explore new avenues for supporting the total sensory experience. Some simple rules can help accomplish this:

For one, extend the off-screen experience to include sensory stimulus. A shipment of coffee mugs from Pottery Barn should include a single-pot brick of coffee from Starbucks. This not only provides a premium to purchase but associates the item with an olfactory cue. This cue distinguishes Pottery Barn at the time of repeat purchase from an exclusively visual presentation made by Crate and Barrel, for instance.

Also, take the human factor into account: expand the site's auditory capability by adding human voice connection capabilities. Call-through buttons are a start, but the recent convergence of computer and telecommunications promises new opportunities for more human interaction over the Internet. In an interesting trend, companies like Keen.com are experiencing some success with "people-to-people" Internet technologies, establishing a voice element to information-gathering efforts.

And ask yourself how you definite what my firm calls your high-value role? Leveraging the company-to-customer relationship to greatest advantage is as important in e-tail as any other business. In the flat world of Web retail, customers require more in the relationship than low prices and convenience.

Some have argued that success with e-tailing is as illusory as the rubber pencil trick. But retailers who begin to adopt sensory selling techniques will begin to redefine their customer relationships through an established high-value role. As the folks at Jordan's Furniture say, "There is no business that isn't show business."

Paul Allen is president/founder of Allen & Gerritsen, Boston, a $90 million marketing communications agency focusing on the business-to-business industry.

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