Blog: e-commerce

Company Stores are Dead. Long Live Company Stores!

Safety First Sign

Many years ago, not too long after e-commerce took off, someone built the first online company store. A simple affair, it offered a few shirts, hats and mugs branded with the company’s logo. The goods were ordered in quantity and kept in a warehouse somewhere, then fulfilled one by one as the orders came in. It was a quaint, uncomplicated time.

Soon, the merchandise ideas expanded, and the distributors providing the stores realized that it might not make sense to keep everything in stock; after all, someone had to pay for all that stuff sitting in the warehouse, and it didn’t always sell, even with a captive audience. Thus the drop-ship company store was born, with lower quantities and on-demand decoration. High-demand items could still be held in inventory and shipped out immediately. Everyone was happy.

Along the way, all sorts of other interesting things happened. Different ways of paying were introduced, along with lots of corporate-friendly features like departmental budgets and approval routing. If John wanted to buy twenty shirts for the trade show, he had to have the money in his budget, and Julie, his boss, had to approve it.

At some point, we packed just about all the technology that we could into company stores, but the basic concept hasn’t really changed much – you’re buying a limited set of branded goods, either because you work for a company or because you’re a fan. Endless bells and whistles can be added to this process, but ultimately, is there anything else to it?

Well, yes. In fact, having watched all this occur over fifteen years in the business, I can tell you that there are some fundamental changes to the company store model that you should keep in mind if you sell and manage these programs. Best to stay ahead of the curve, right? Here are some of the changes we’re seeing in the world of company store programs:

They’re Becoming Multipurpose

Company stores are rapidly becoming jacks-of-many-trades; from handling reward programs (more on that in a minute) and marketing collateral to incentive products, a company store may need to do more than just serve up a standard platter of promotional items to justify its existence.

Company stores often become “branding hubs” for many corporations, a place where anything company-related can be purchased or fulfilled. Be prepared to deal with products you may not be familiar with, like custom-printed business cards or postcards. Many company stores offer plug-ins or other tools to handle these processes.

They’re Learning to Talk (more)

For many larger corporations, the “punch-out” company store has become mandatory. What does that mean? Big companies like to manage all their purchases through procurement systems like Ariba or Coupa. So when someone in the marketing department goes to buy a carton of paper, a new laser printer or a box of custom t-shirts, they have to use this software or web site. The procurement system serves up a list of approved vendors and handles the purchasing approval, invoicing and other details of the transaction.

In order to make your company store work with Huge Mega-Corporation Inc., you’ll need a company store platform that is compatible with these systems. Look for “punch-out” compatibility or compatibility with the specific system that the company uses. You’ll see this on the RFQ or RFP that the company issues.

If your big client isn’t using one of these now, you might not want to rest easy; these systems are growing in popularity, and there’s a good chance that a major corporation will implement a procurement system sooner or later. Stay in the loop with your contacts there and be prepared to offer a compatible solution.

They’re Expanding their Reach

By far the biggest growth we’ve seen in company store-style programs in the last couple years is the “performance” program. These are similar to incentive and rewards programs that you already know well, like your credit card reward program or airline awards.

The primary difference is that these are often purpose-built for specific needs. Safety award programs have been around for years, and these continue to be popular uses for company store platforms. But many companies are crafting programs for specific purposes and building their own metrics; a healthcare company may have specific goals, such as assisting other employees, that they offer rewards for. There is no limit to the measurable metrics that can fuel a reward program.

Often, these programs offer a mix of branded and incentive products. At the lower tiers, you might get a hat or a nice travel mug for your performance. At the higher levels, once you’re collected a lot of points (or chips, or dollars, or whatever you’d like to call them) you could get a flat screen TV or a vacation to the Bahamas.

It’s important to note that more and more of these programs are using the technology of the store itself to handle all the moving parts. In other words, years ago you might have handed out printed certificates for a good safety record or assisting someone else. Increasingly, the issuing of awards and the redemption process is all handled online, through email and online stores.

When you have a client whose company store program has grown stale, it’s worth pitching these types of programs to them. Because the results are measurable (e.g. less accidents; better reported employee satisfaction), these programs offer something that goes far beyond the basic branding reinforcement that the traditional company store provides. They satisfy more departments, as the human resources folks and the bean counters love them too.

They Will Always Need your Creativity

We see company stores go away sometimes simply because the distributor never got past the “this is just a place for people to place orders” mentality. While there are certainly many company stores that can happily sit and fulfill products for a healthy demand, others require some creativity. Many (if not most) of your clients are not merchandisers; that’s your job. You need to stay abreast of interesting new products and pitch them regularly.

Just because a company store starts as a quaint selection of a dozen products doesn’t mean it has to stay that way. If you see traffic declining or other warning signs (product activity reports are a great way to get a better understanding of what’s going on), start talking to your client about options for expanding or changing the focus of the program. You’ve got the relationship and the store is there. The solution may not be the same one you sold them a few years ago, but that doesn’t mean it (and you) can’t still be the solution.

A version of this article also appeared in Identity Marketing magazine.

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What the heck is a punchout company store?

If you haven’t yet, you’re probably going to get an RFP or RFQ from a big customer that requires a company store with punch out (or “PunchOut”) capability. What exactly is a punch out store anyway? And why should you care?

A lot of large corporations use procurement software to control how goods are purchased. If you’re in the marketing department at one of these companies and you need to buy some pens, you log in to these systems —Ariba, Coupa, SAP, Oracle or one of many others—and place your order in there.

The primary advantage of these systems is controlling cost. They manage budgets, limit spending and try to make the purchasing process as efficient as possible. However, they don’t do things that some e-commerce stores can do, and that’s where the “punchout” comes in.

Punch Out Company StoresWhen you build a company store for a customer, it often contains complex products like apparel that will be decorated with one or more company logos, name drops or other customizations (all of which are easy to setup in storeBlox CS, of course!). Instead of configuring and buying these products in one of these applications, a punchout allows the buyer to temporarily exit to buy these goods in your company store—which can handle all that decoration a lot more easily—then pushes the transactions back into the procurement system.

If it sounds complex, it is! There are a lot of moving parts, but the good news is that storeBlox CS supports punchouts with nearly every major system using the cXML standard.

At eBlox, we’re pros with punchouts, so if you’ve got an opportunity and need some help answering questions, digging into technical details or building a punchout strategy for your customer or prospect, give us a shout!

Think Boutique

Boutique shop

If you’ve tried to market your promotional products website, you’ve probably learned a few ugly truths about selling online. First of all, it’s expensive! Unless you’re marketing solely to a limited geographical area, competing nationally for clicks is often prohibitive. Why? Because the top five or so promotional products websites collectively spend tens of millions of dollars (really!) per year on pay per click advertising alone. One major distributor spends over six million dollars every year, and that doesn’t even include the money spent on organic SEO (to boost their search ranking) techniques like content generation.

Second, spending money is no guarantee of sales (conversions). Many visitors to your site are often cross-shopping you against other distributors to get the best deal; countless others are researching ideas and leave without purchasing. In an environment where popular terms (think “custom pens”) can fetch anywhere from $8–13 per click, you can throw an awful lot of money around before you land a completed sale. If you’ve got the money and the cost works within your margins, then good for you. But most distributors don’t have that kind of scratch.

What to do? I’ve preached before about using your uniqueness as a web marketing strategy, and now I think it’s safe to say that for most distributors trying to carve out a healthy online sales channel, narrowing your focus is the only realistic strategy. The big online distributors are spending so much money that they have become de facto Amazons or Wal-Marts – almost unassailable for basic, inexpensive promotional products.

The lesson of Amazon/Wal-Mart is important, because in the face of their domination, millions of smaller businesses continue to thrive. Consumers love variety and tend to shy away from buying every little thing from monolithic vendors, even when it’s more convenient – we want to support local businesses or just get out of the house for a while. In addition, the movement toward local, “artisanal” products and luxury goods ensures that there will always be room for alternatives to the big guys, even when they’ve figured out how to get a drone to deliver your toilet paper in 15 minutes.

Does that mean you should change your name to “Pete’s Olde Tyme Artisanal Promotional Drinkware and Mustache Wax Shoppe”? Of course not. But it’s worth considering the realities here – while countless book store chains and music stores have shut down during Amazon’s rise to prominence, thousands of other businesses have thrived by offering things Amazon either can’t or won’t offer – highly personalized service, unique products, specialized luxury goods and a variety of other goods and services that consumers like to touch or customize.

A Different Approach

There’s an old term to describe this approach: a boutique. A boutique typically caters to a specific audience with a narrow selection of products. It’s the opposite of general stores; in fact it thrives in spite of them. Boutiques focus on product selection and service rather than low prices and volume. To be successful selling promotional products and apparel online, you need to start thinking like a boutique.

This doesn’t mean dropping everything except one category from your site, although slimming down your product offerings is always a good idea, as I’ve mentioned before; a catalog of 100,000 products is not only bad for SEO; it’s disservice to your visitors – after all, who wants to sort through 25 nearly identical mugs?

What it does mean is adopting a more careful approach to merchandising. Focus on a few categories for the purposes of your general web marketing. Showcase your strengths – you’re the expert, and you can express that through the choice of products that you sell. We have clients who market primarily to certain industries or segments – insurance agencies, oil field services, the military – but also sell effectively to other customers.

Therein lies one of the boutique’s secrets: When you walk into a well-merchandised boutique, you’ll often find that the product mix is actually wider-ranging than the expressed focus of the store. For instance, if they’re selling mostly expensive designer clothing, there are plenty of unrelated products for those customers who can’t afford the $400 dress – a table of scented candles here, a display of less-expensive jewelry over there. The shop owner knows that not everyone can afford the designer dresses, but customers love walking out with a bargain from the same shop. They make sure that there are opportunities at a variety of price points and related categories. Think about it: there are far more Ferrari t-shirts than there are Ferraris.

Of course, with a promotional products website, the model isn’t quite as simple. Even with a sane (read: less than 10K) product selection, you’re still selling a ton of products, and it’s unlikely that they all “fit in” with each other in any kind of theme. That’s fine, because we’re using the boutique model as a traffic generation strategy. Once they get to your site and start poking around, you can show them the candles and the jewelry.

Merchandising like a Pro

How does this work? In many different ways. If you are able to develop a focus through merchandising, then you should by all means do so. In two of the examples I mentioned above – insurance agencies and oil field services – there are specific categories of products (card holders and calendars in the first example, workwear and outdoor products in the second) that are popular with their clients and prospects. While each company focuses their merchandising and marketing on promoting these products, both also sell a wide variety of other products.

And you know what? Those other products sell too! They build a relationship with a prospective customer by showing them what they asked for, and then those customers come back and buy other things.

A product-centered marketing strategy is particularly effective online because it dovetails with what users are searching for. You have a concentration of products within a few particular categories or usages, and you’ll perform much better in organic search. True, you won’t get as many visitors coming in for “promotional products” searches. But the hard reality is that you wouldn’t have gotten them anyway, because you couldn’t afford them in the first place!

Beyond merchandising, there are other ways to specialize and drive more quality traffic to your site. A local focus is an obvious approach, and is the simplest method of maximizing your ad spend. Industry-specific approaches are also very effective – you might already have colleagues in industries that you can help you with tailoring an advertising and content approach to their segments. You can also focus on service, expertise or a “high-touch” experience.

The important thing to remember is that you have to be disciplined and willing to reexamine your own assumptions. Your past sales may indicate that inexpensive pens are your sweet spot, but online, “cheap pens” ads might cost you $16 per click. Is that worth it for an inexpensive pen order? Don’t assume that what’s worked offline will work online. Be ready to experiment – set up some specialized catalogs and blog posts and see where they get you. A tight focus may not bring you high volume, but it will bring you higher quality leads, with whom you can build a long-term relationship.

A version of this article also appeared in Identity Marketing magazine.

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