Out of gasScott Silverman, Executive Director of Shop.org, recently asked a provocative question on the Shop.org Blog on whether or not now was the time for online retailers to stress saving gas in their marketing message.  The short answer is “yes – it is definitely time!”.  The longer answer is that there are many word-of-mouth oriented reasons to do this now but I predict that it will be hard to make happen in most companies (to be explained below).

First, there has never been more of an emphasis on gas prices in my lifetime, and certainly not in the history of eCommerce (being a relatively new field).  On my flight up to Toronto yesterday, I was reading a NY Times article, “American Energy Policy, Asleep at the Spigot“.  I was amazed to learn that oil was just under $10/barrel in early 1999.  It has increased 1450% since then, closing at a high of $145/barrel last Thursday.  Not surprisingly, most Americans are downsizing.  But what is surprising is how quickly.  Ford’s SUV sales are down 55% this year, and their sales of the Ford F150 truck, the best selling vehicle in the U.S. for 26 consecutive years, is down 40% this year.  Detroit is reeling from this – this is an unbelievably massive change in consumer demand.  To put it mildly, gas prices are dominating word-of-mouth conversations all over the country.

Second, a huge share of word of mouth is focused on the global problem of climate change.  With gas prices running this high, it is easy to feel both guilty and financially irresponsible.  This gives you a dual opportunity to strike now with this marketing message.

Third, home delivery is more efficient.  Jeff Bezos’ clued me in to this in his recent appearance at WSJ’s D3 conference.

MR. MOSSBERG: Are you seeing the effect of this economic slowdown? Or do you worry about it?

MR. BEZOS: As you can see from the last-quarter results that we just put out, we haven’t seen that. You can never know for sure because I don’t know what our growth rates would’ve been in a stronger economy. There are some things working to our advantage in this kind of economy.

Gasoline is expensive. Driving to the store is expensive. You take a 2,000-pound car to pick up five pounds of stuff. It’s the least efficient transportation network in the world. So, there are some positive factors in our business in that regard.

To my co-founder’s point about the importance of authentic green marketing, it is time for retailers online to emphasize this.  A very simple Web page devoted to educating consumers on why USPS, UPS, FedEx, and others are more efficient in their use of gasoline and, therefore, have less impact on the environment is all consumers need.  They are almost begging for this message.  Retailers should promote this message in stores, email, and throughout their website.

But here is the rub.  It is hard to do because most retailers online are part of a huge multichannel business.  And I know from experience that the store managers will not embrace this message for fear of losing their sales.  Just like the book Freakonomics educates us on the importance of incentives, incentives in these businesses need to change.  And that takes time.  So, this is probably an immediate word-of-mouth opportunity for online-only retailers, but I would love to be surprised and see multichannel businesses embracing this message and gaining share as a result.  I’m confident that the in-store message could be figured out (e.g., “buy accessories for this digital camera online instead of driving back – here is why it will cost you less and help our environment”).

What do you think?

P.S., to learn more about why the time is now, check out my previous posts (post1, post2, and post3) on how Netflix attracted Blockbuster’s customers with their simple marketing message, “the end of late fees”.  You will find that the battle of these two giants offers many fascinating word-of-mouth insights.

Update 7/8: Peter Cobb, co-founder and SVP at eBags, just sent me the link to a recent email promotion (here) that they sent to customers, emphasizing free shipping and saving on gas.  I also like the fact that this campaign highlights eco-friendly bags.

18 Responses to “Retailers: Now It’s Time to Stress the Environmental and Cost Benefits of Shopping Online”

  1. Gata_Louca

    Interesting post – you are bang on with the incentives comment. Our stores barely talk about our website, much less drive business to it; and its not because they aren’t trained well or clued up (although those are challenges) its because management are disjointed with specific agendas that benefit their departments or bonuses. It is the responsibility (and to their benefit) of management at board level to get buy in for the web channel aat the very top and disseminate that down. Push the efficiencies, be it savings in fuel prices and the environment, to get your customers buying online and keep store sales strong with well positioned promotional activities. At the end of the day, you may be losing both store and web sales to the competition in these difficult times. I would rather push my web sales than lost across all channels.

  2. Gata_Louca

    Interesting post – you are bang on with the incentives comment. Our stores barely talk about our website, much less drive business to it; and its not because they aren’t trained well or clued up (although those are challenges) its because management are disjointed with specific agendas that benefit their departments or bonuses. It is the responsibility (and to their benefit) of management at board level to get buy in for the web channel aat the very top and disseminate that down. Push the efficiencies, be it savings in fuel prices and the environment, to get your customers buying online and keep store sales strong with well positioned promotional activities. At the end of the day, you may be losing both store and web sales to the competition in these difficult times. I would rather push my web sales than lost across all channels.

  3. Brett Hurt

    Eric and Adam,

    Good points, from an environment standpoint. The challenge for retailers with a consumer dependency on catalogs is changing customer behavior. Featuring reviews in catalogs with a message to go online and learn more should start to reduce consumer dependency on the use of catalogs. However, I would be very careful in cutting catalogs altogether. The “clutter” of catalogs in a consumer’s home sometimes reminds them to buy. There is a permanence with print catalogs that just doesn’t exist with email, which is so easily buried with other digital “clutter”.

    Also, I think the environment impact of sending catalogs is far less than the impact of everyone driving to the store to pick up a few items.

    In the end, business and consumer goals have to be aligned. This is what Detroit is grappling with in the auto industry. They simply cannot innovate fast enough to capture the major shift in demand. We need real alternatives to gasoline-powered cars, but it is going to take time and many efforts have failed (remember my post on the Tesla? – it still hasn’t made it to the market – http://tinyurl.com/6cehmr – hopefully the Chevrolet Volt will be a success, or maybe even the BMW 7 Hydrogen as a beginning for BMW to shift all of its cars).

    Thanks for taking the time to comment.

    Best,
    Brett

  4. Brett Hurt

    Eric and Adam,

    Good points, from an environment standpoint. The challenge for retailers with a consumer dependency on catalogs is changing customer behavior. Featuring reviews in catalogs with a message to go online and learn more should start to reduce consumer dependency on the use of catalogs. However, I would be very careful in cutting catalogs altogether. The “clutter” of catalogs in a consumer’s home sometimes reminds them to buy. There is a permanence with print catalogs that just doesn’t exist with email, which is so easily buried with other digital “clutter”.

    Also, I think the environment impact of sending catalogs is far less than the impact of everyone driving to the store to pick up a few items.

    In the end, business and consumer goals have to be aligned. This is what Detroit is grappling with in the auto industry. They simply cannot innovate fast enough to capture the major shift in demand. We need real alternatives to gasoline-powered cars, but it is going to take time and many efforts have failed (remember my post on the Tesla? – it still hasn’t made it to the market – http://tinyurl.com/6cehmr – hopefully the Chevrolet Volt will be a success, or maybe even the BMW 7 Hydrogen as a beginning for BMW to shift all of its cars).

    Thanks for taking the time to comment.

    Best,
    Brett

  5. Brett Hurt

    Thanks Ellen, that is a good article by Tracy. I hope that my post is a good “answer” to Tracy’s challenge for retailers to do their best during these tough times for consumers.

  6. Brett Hurt

    Thanks Ellen, that is a good article by Tracy. I hope that my post is a good “answer” to Tracy’s challenge for retailers to do their best during these tough times for consumers.

  7. Ellen Davis

    Really insightful blog post, Brett.

    Retailers who are trying to understand the impact that gas prices are having on their customers should read this month’s President’s Page column by Tracy Mullin in STORES magazine. The article references BIGresearch data, which states that 86% of Americans are affected by gas prices, up from 76% who were affected one year ago. While the information is sobering, it may provide good insights for retailers in marketing efforts.

    The column can be viewed at: http://www.stores.org/Current_Issue/2008/07/President'sColumn.asp.

  8. Ellen Davis

    Really insightful blog post, Brett.

    Retailers who are trying to understand the impact that gas prices are having on their customers should read this month’s President’s Page column by Tracy Mullin in STORES magazine. The article references BIGresearch data, which states that 86% of Americans are affected by gas prices, up from 76% who were affected one year ago. While the information is sobering, it may provide good insights for retailers in marketing efforts.

    The column can be viewed at: http://www.stores.org/Current_Issue/2008/07/President'sColumn.asp.

  9. I think it’s important for us etailers to go one step futher. Just promoting the fact that buying online is good for the environment is fine, but fortifying it with “Plus, 1% of all sales will go to The Nature Conservancy” is 100 times more powerful.

    I also agree with Adam, that the catalog industry needs serious reconsideration. Sure catalogs are an important advertising vechicle, but do I really need 4 copies of the same catalog?

  10. I think it’s important for us etailers to go one step futher. Just promoting the fact that buying online is good for the environment is fine, but fortifying it with “Plus, 1% of all sales will go to The Nature Conservancy” is 100 times more powerful.

    I also agree with Adam, that the catalog industry needs serious reconsideration. Sure catalogs are an important advertising vechicle, but do I really need 4 copies of the same catalog?

  11. Very interesting and timely. This sounds like the argument people have against e-mail vs. catalogs. Catalogs cause thousands upon thousands of trees to be cut down, but it’s old business, and we know old business dies hard.

  12. Very interesting and timely. This sounds like the argument people have against e-mail vs. catalogs. Catalogs cause thousands upon thousands of trees to be cut down, but it’s old business, and we know old business dies hard.

  13. Brett Hurt

    I don’t agree with your opinion on this. Transportation operations are highly concerned with efficiency and cost, especially at their scale. Their scale leverages much greater economies than individual drivers. This should be easily explainable to the average consumer, using pretty straight-forward language. Consumers are smarter than some give them credit for.

    Also, transportation companies would be the first to adopt alternative fuel, if real good options were available. Read the NY Times article to understand why they aren’t.

  14. Brett Hurt

    I don’t agree with your opinion on this. Transportation operations are highly concerned with efficiency and cost, especially at their scale. Their scale leverages much greater economies than individual drivers. This should be easily explainable to the average consumer, using pretty straight-forward language. Consumers are smarter than some give them credit for.

    Also, transportation companies would be the first to adopt alternative fuel, if real good options were available. Read the NY Times article to understand why they aren’t.

  15. A gas crunch will definitely open many ears to this information. Still, I think there’s a fundamental flaw in the way all transportation operations are run, in that they only exacerbate the impending energy crisis without putting a whole lot of funds in the hands of any kind of technology or industry reformer. Just my 2 cents.

  16. A gas crunch will definitely open many ears to this information. Still, I think there’s a fundamental flaw in the way all transportation operations are run, in that they only exacerbate the impending energy crisis without putting a whole lot of funds in the hands of any kind of technology or industry reformer. Just my 2 cents.

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