Have you ever asked yourself what separates one online retailer from another? Especially those smaller online retailers that don't have the benefit of a well known name like Target or Best-Buy? Stop for a second and think about that. What is their unique competitive advantage? What is the only really big differentiator (besides price based promotions or free shipping) that one online store can offer you over another? What is the one thing an online store has that their competitor likely may not?
Ok so we'll get to that but first let me tell you a quick story to place this whole post in context.
Ever see one of the devices in the picture above? Me either...but this is what my son's baseball coach told him he needed to improve his hitting. It's the Quickswing Batting Aid. So, being the great dad that I am, ordered him one. I was traveling so the only way to get it was online, which I did. I even got the net that goes with it so he could use it in the back yard. All in all -- best $140 I've ever spent. He (and his two brothers and sister) used it, loved it and during parties all the kids would take batting practice.
Best of all - it works. His hitting has improved. But that is where the good news ends.
You see the net that came with it broke. Thus, without a net, he couldn't use the device without breaking a window...so I sent an email to the online retailer that we purchased it from and requested assistance. What I got back was:
I was a bit surprised as I'm used to retailers playing that middleman role. Usually they take care of your problem (replace defective merchandise) and then handle the issue with the manufacturer directly. That's the hallmark of great customer service. So now, maybe you're saying that customer service is the answer to the question we began with? And yes, customer service is certainly a differentiator... but let's face it, great customer service CAN be duplicated. So while important, I don't think it is the one thing an online retailer possess that their competitor doesn't.
Now luckily for me, the fine folks over at Quickswing rock the customer service world. Through a very quick series of emails, they concluded that the best way to ensure they fixed my problem was to just send me a new net. Which takes me to the final point of this post... check out the pic below.
See that little Google Checkout cart? See what the online retailer gave up when they pushed me to the manufacturer? They gave up the ultimate resource. The single biggest differentiator an online retailer has to compete in today's hyper-competitive retailing world.
They gave away the customer relationship.
Yep, they could have helped me and kept that relationship for themselves. I have three boys (11, 7, and 2) who will all play baseball for a very long time. What's the lifetime value of that relationship that they just gave away to the manufacturer? It's one thing for a brick and mortar store to cede the relationship to a manufacturer because the brick and mortar retailer has convenience as a tool in their marketing toolbox. But the online retailer is only as good as their last click. The only thing they have going for them is the customer relationship. Cede that to the manufacturer (who as we see can also be the retailer) and you give away what is probably the biggest, most valuable asset you own as an online retailer.
Well, at least that is what I think. But what about you? What do you think?