True value’s digital differentiation
Ten months after the launch of True Value’s new-and-improved e-commerce program, the statistics are beginning to pile up. Most importantly, perhaps, almost 2,000 stores have signed up for the program, allowing customers to shop online and pick up purchases in their local hardware store.
There are some things still unknown in the e-commerce world, such as the correlation between Web browsing and in-store buying. But True Value believes it’s getting closer to an understanding. And it likes what the data are showing.
“Through our online surveys, we’re consistently seeing about 40% of our customers report that their next action after they leave the site is to either visit a True Value store or call a True Value store,” said Lisa Fortuna, True Value director of e-commerce.
The average ring for an online order consistently runs in the $60 to $70 range — about three times the average ring in the store.
For dealers, the only requirement to join the program is an agreement to receive some basic order-fulfillment and customer service instruction. There is no cost to join. “Feedback from those retailers has been very positive,” Fortuna said. And for the co-op, the ability to learn from the habits of online browsers is invaluable. “Consumers are using the site to research products, and we see how it’s driving footsteps into our stores,” she added.
While the site continues to churn data and drive traffic, the actual e-commerce sales transactions have been behind plan, according to the co-op. That’s partly because of an aggressive forecast, and partly because a higher-than-expected percentage of consumers are going to the stores to make their purchase.
“For the sales we’re transacting as e-commerce, we’re not happy with the overall sales compared with our forecast,” said CEO Lyle Heidemann. “But we’re not unhappy with where we’re at. And we know we are driving footsteps to the store.”
In addition to traffic, visibility is huge. The ability for the co-op to monitor the all-important product search field leads to actionable intelligence. Analyzing the search terms helps the co-op stay ahead of consumer demand or spot trends.
One early discovery has been how quickly customers change their product searches when the seasons start changing. Searches for roof rakes and other snow-related products lit up the charts last winter. “That’s really valuable information for our merchants,” Fortuna said. And there have been other lessons learned as well.
“Fencing was a top search term for us going into the summer,” Fortuna said. “It was ranking in the top 10 pretty consistently, and that was one of the surprises for us.” The company added SKUs and watched as sales increased.
Another bit of online intelligence gave a boost to sales of kids’ pools when the temperatures began to soar in the summer. “We only had a couple online, so we added everything,” she said. “Those are items a store typically wouldn’t go very deep on, but we definitely have an opportunity for that online.”
The company’s digital strategy expands beyond its e-commerce. It also embraces e-marketing, e-coupons and interaction with mobile consumers.
Coupons are getting better. The online version of the company’s classic $5-off-$25 coupon includes some enhancements for security and targeting. The coupon has delivered impressive results over the last five years, or so, producing an average of $42 to $46 per transaction. The Web version of the coupon has a watermark to prevent duplication and a unique code for each coupon printed. It also has a promotional code redeemable on TrueValue.com.
“We want to make sure the coupons get into the right hands for our target, the DIY enthusiast,” said Michael McCann, director of consumer marketing at True Value.
Also keeping up with the times, the company will launch its mobile portal in September, delivering True Value services to consumers’ Blackberrys, Androids and iPhones.
Some of the features include a store locator, local ads, shopping at TrueValue.com, project help from StartRightStartHere.com and social media connections.
While True Value said the 2,000 participants represent a strong showing, the co-op wants more dealers to sign up for ship-to-store participation. And it has a simple pitch: “There is no charge, they receive high-quality training and support, and they see the entire margin for the sale,” Fortuna said.