Not synonymous with innovation and bleeding-edge retail but Tom found this article in Business Week which features LL Bean as a 'Customer Service Champ' and focuses on their success in transforming themselves from a catalogue to an online brand:

http://www.businessweek.com/magazine/content/10_09/b4168043788083.htm?chan=m

Proof that, in an online space, 'delight factors' become 'hygiene factors' in the blink of an eye.

http://connect.walmart.com/Hometrends/?adid=1500000000000006820330

Everything visualized, in context and shoppable.  Very nice!

One of the major brand principles we’re proposing for Very is that it should take a much more editorial stance and put strong point of view on style to help give customers confidence in their purchases.  We also think absolutely everything should be shoppable, hence our new mantra of “if you can see it you can shop it”.

Then Ger pointed us in the direction of a friend who has curated a highly eclectic online shop, designed with these principles in mind:

http://www.supermarketsarah.com

Admittedly, it’s different demographic and aesthetic to Very but it’s a great demonstration of the art of the possible.

... and is apparently proving to be very successful:

www.spartoo.co.uk

A colleague in the US found out about an intriguing new service called ‘Groupons’:

Coupons for Groups by Local Businesses
http://www.groupon.com/welcome_to_groupon

How It Works
   1. Each day we feature something cool to do at an unbeatable price.
   2. You only get it if enough people join that day… so invite your friends!
   3. Check back the next day for another awesome Groupon!

He writes:

Their business model is fascinating (enough so that they just raised $30 m for expansion):

http://www.techcrunch.com/2009/12/02/groupon-gets-a-hefty-30-million-from-accel-for-local-offers-service/

It’s really a customer acquisition play for companies:

“Example – 1,600 people in one day bought skydiving lessons in Chicago <http://www.groupon.com/chicago/deals/chicagoland-skydiving-center> , says the company, getting a 44% discount on the $229 price. And the company making the offer normally sells just 6,000 lessons per year. They sacrificed some profit, but gos lots of new customers.”

“Groupon generally takes 30% – 50% of the total price paid for the service, and they are on track, they say, to do $100 million in gross merchandise sales in 2010.”

A note on the “group buy” thing:  On the Chicago Groupon site, I cannot ever recall a Groupon that didn’t hit the minimum needed to do the group buy, so while that may have been initially something that made it viral, now it is just the great deals.  Basically, groupon is WOOT, but a business is being sold instead of a product.

Tom stumbled across this article in The Economist and wondered "does it imply that warranty should be pushed more for 'fun' products, and does it suggest that the warranty should be made to feel like a more emotional decision too?"

Protection racket
Nov 19th 2009 From The Economist print edition

If extended guarantees are overpriced, why are they so popular?
CUSTOMERS tend to agonise over the relative merits of different models of
electronic goods such as digital cameras or plasma televisions. But when
they get to the till, many spend freely on something they barely think about
at all: an extended warranty, which is often more profitable to the retailer
than the device it covers.

Shoppers typically pay 10-50% of the cost of a product to insure it beyond
the term covered by the manufacturer¹s guarantee. The terms of these deals
vary (and there is often a great deal of fine print), but they usually
promise to repair or replace a faulty device for between one and four years.
Yet products rarely break within the period covered, and repairs tend to
cost no more than the warranty itself. That makes warranties amazingly
profitable: they generate over $16 billion annually for American retailers,
according to Warranty Week, a trade journal.

[The rest of the article is posted in the Comment section]

Last night, Dispatches aired a programme about ‘Christmas on Credit’ hosted by Jane Moore.  You can watch it again here:

http://www.channel4.com/programmes/dispatches/4od

But the synopsis is:

“Banks and building societies close their doors to all but the least 'risky' borrowers, Dispatches reporter Jane Moore investigates a highly lucrative financial industry that has stepped in to provide loans to the millions of people denied credit elsewhere.  In the run-up to Christmas, the impact of these high interest rate charges can be financially devastating for some families. Dispatches visits areas of the country where whole streets, and sometimes virtually entire estates, are in hoc to such lenders.”

US online retailer Zappos.com has decided to augment its website with a paper catalogue:

http://www.nytimes.com/2009/12/07/business/media/07zappos.html?_r=1

This strikes me as interesting for at least 3 reasons:

1)      Zappos clearly acknowledge that there is a different experience to be gained from flicking through a catalogue vs. browsing a website

2)      Zappos say it’s been particularly effective in re-activating dormant customers and that orders have almost doubled compared to pure online shopping

3)      They’ve very much gone for a lifestyle magazine format but added new product ranges (clothes, accessories etc) to compliment their core offer around shoes

Wonder how we could get our hands on a copy?

Following the Amazon Prime model, ASOS introduce ASOS Premier to “save you time and money”:

http://www.asos.com/pgehtml.aspx?cid=8962&affId=1134

For £24.95 a year you get:

·         Free and unlimited next day delivery year
·         Free return collection service all year
·         No minimum order value

The advertised benefits are entirely functional/transactional – interesting to see if signing up actually gets you a better experience in some way too...