Platt Perspective on Business and Technology

Productivity and abundance, and the paradox of choice – 2

Posted in startups, strategy and planning by Timothy Platt on April 24, 2012

This is my second posting to a short series on the meaning of, and the sometimes seeming-paradoxes of choice (see Part 1 for a discussion of these issues as they arise when considering inventory selection in a bricks and mortar storefront.) I continue this discussion here, turning to consider the online store with a web site counterpart to the bricks and mortar store’s isles and shelves.

Traditional bricks and mortar storefronts organize their product offerings along shelves and racks, and any one item can be displayed at any one time in at most one place in the store. Types of items can and sometimes are distributed into two or even more places in this type of store – and that can cause problems for customers and certainly if they do not arrive expecting or knowing a priori, the reasoning that the store uses in its product placement. I cited ketchup in Part 1 and the issues that arise as customers face choices to select from when buying it. Now consider a store that partitions-off organic-labeled foods of all types into a special area on its own shelf. And a customer walks in looking for ketchup and does not know that as they are a new customer to that store. So they ask a clerk where the ketchup is and in most cases they would be told where to find condiments in general – the aisle with ketchup, mustard, pickle relish and so on, and not about the organics food isle. They might or might not find what they are looking for and even if they examine every bottle on the shelves in that isle. But as a trade-off the organic food preferring customers like to see everything organic in one place.

In principle, online stores can avoid the problems and complexities of one item only sitting in one place at the store. With online search and whether menu-driven or by search query, every organic product can be included in a separate organic food area – and every item there can also be included in their correct general product category areas too (e.g. pastas and pasta sauces, breads and other baked goods, condiments with those organic ketchups included and so on.) And in fact select items can be placed in more than one general product category bucket in this, accommodating the fact that different customers might classify the same products differently as to use.

But online customers can still face real challenges looking for the items on their want list, let alone the items they would more impulse-buy. This is where an aspect of web design called information architecture comes in and I add many online stores do this badly.

• How are the items to be sold organized into web directories and sub-directories?
• How are these items and the nested directories they are placed in labeled?
• What types of details are provided about offered products to help customers make their selections?
• Are product comparison tools offered, and if so how do they work and do they offer the types of comparative information that real-world customers would want and use?
• How does all of this connect into the online tools and resources for making purchases?
• Does the business offer customers more than just one way to make purchases, with for example, online forms for making them through more automated processes, and a toll-free number for speaking with a sales representative?
• I could add a fairly long list of additional questions here but the basic point behind all of them is fairly simple and quite consistent. On the positive side this is a question of what levels of satisfaction the average customer would face. On the negative side substitute in the word frustration. How does this online business handle customer questions and resolve problems and complaints?
• How does insight offered from the marketplace in this way feed back to the store in helping it to course correct where that is needed, and to fine tune and improve in general, in making itself more competitive and effective?

Online customers can find themselves facing many of the same issues as far as choice is concerned as do bricks and mortar stores’ customers – and as both a positive value for them and with selection overload the downside of this too. Some of this can be corrected for and even with a tremendous selection to choose from, if:

• The store organizes its offerings effectively so their customers can filter and select down by searching according to the distinctions that make a difference for them.
• If they can control how many selections within a search they see at once.
• If they can fine tune or modify a search they have made and to either make it more restrictive or to make it wider in scope, to meet their needs.
• And for repeat customers if a customer relationship management (CRM) back-end support system keeps track of what types of purchases that customer makes and the site picks up on when they are purchasing according to a recognized pattern, making suggestions.
• This in practice means these systems stopping making suggestions too, if the customer indicates they do not want them by ignoring or clicking away from them. Basically, even the most automated customer-facing systems increasingly have to be able to reason and make artificial intelligence-backed decisions if the business is to remain competitive in the online marketplace.

I am going to turn in my next installment to the issues of choice and of selection offered through marketing campaigns, and finding the right items to explicitly market to draw customers into a storefront – or into a web site and its online store. Meanwhile, you can find this and related postings at Business Strategy and Operations – 2 (and also see Business Strategy and Operations.) I have also included this series in Startups and Early Stage Businesses.

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