Hypothesis validation : online or brick and mortar experience? And why?

[Claudia NG]

Dear OpenFroggers,

I have recently started a company dealing with Unmanned Aerial Vehicles.

Part of the business includes an online shop front. 

However, we realised that while customers were enthusiastic to engage online for general enquiries, they were reluctant to close a deal if they couldn't touch and view the item first in a physical brick and mortar shop.

I am wondering what is the experience of the folks here who run ecommerce store?

Do you guys face the same problem?

How do you mitigate it? 

Also, if you were the shopper, do you prefer to buy online/offline? If so, why? Is touching/seeing the product important to you in determining your decision to buy from one merchant vs another (assuming prices are similar)

I would be really happy if some of you can share your experience/personal preference.

Thanks all in advance!

Claudia

[Jiin Joo Ong]

What are your returns policy for UAVs? If they buy it from you but it doesn’t fly (or it crashed and burned), can they get a refund or an exchange? What if everything is fine but they just don’t like it, can they get a refund or an exchange?

--
You received this message because you are subscribed to the Google Groups "OpenFrog" group.
To unsubscribe from this group and stop receiving emails from it, send an email to openfrog+u...@googlegroups.com.
To post to this group, send email to open...@googlegroups.com.
Visit this group at http://groups.google.com/group/openfrog.
For more options, visit https://groups.google.com/d/optout.

[Claudia NG]

Hi Jiin Joo,

The return policy for UAVs is much like most consumers' products (think purchasing a car) you see out there in the market. Of course, if the UAV is DOA, then we will work with the manufacturer to get the customer a replacement. However, if it is a crash (pilot's error), then the warranty does not cover that. If the customer changes their mind after buying - unless there are very specific reasons eg. our recommendation did not meet their business needs etc - then they will have to stick with their decision or sell it cheap 2nd hand. 

Hope that answers your question. :)

[Janice]

What's the average spend of a customer per purchase? How many purchases are they likely to make each year? 

[Claudia NG]

Hi Janice,

We sell a variety of solutions, which is at a price range of anything between SGD2,000 to SGD25,000.

The amount of purchases they will make will depend on the customer type.

If it is a regular consumer who is after a UAV to take pretty pictures/videos, the chances of upgrading/purchasing in a year is minimal.

However, if the customer is an enterprise, then the chance of additional purchase within a year is much higher once they see the value of the product is delivering for their business. 

I hope that answers your question. 

Cheers,

Claudia

--
You received this message because you are subscribed to a topic in the Google Groups "OpenFrog" group.
To unsubscribe from this topic, visit https://groups.google.com/d/topic/openfrog/2XYY54DFR5Y/unsubscribe.
To unsubscribe from this group and all its topics, send an email to openfrog+u...@googlegroups.com.

[Jiin Joo Ong]

Well I don’t know much about retailing drones, so I can’t really empathise with the problem. However, your respond does hint rather strikingly when you said “think purchasing a car”. Bought a car online before? Honda Civic, Add To Cart, Checkout? Why do we walk into the shop to test drive a car?

(p/s I do “buy” drones, and sometimes they are more expensive than a car without the COE)

[Claudia NG]

Interesting Jiin Joo. I suppose your point is that, for an item of that price point, you will need a brick and mortar shop to convince you of your purchase?

--
You received this message because you are subscribed to a topic in the Google Groups "OpenFrog" group.
To unsubscribe from this topic, visit https://groups.google.com/d/topic/openfrog/2XYY54DFR5Y/unsubscribe.
To unsubscribe from this group and all its topics, send an email to openfrog+u...@googlegroups.com.

[Janice]

As a bit of background, we sell human hair products. Average spend per purchase is $447. Number of purchases per year is 2 - 5. I think it's also important to note that most of our clients are end users based in Western countries and are largely unfamiliar with Cambodia, our home base. 

We're 100% online. And given our client's average spend, I think that's a helluva feat. We overcame reluctance via the great equalizer, otherwise known as social media, and a qualitative product. Video testimonials, volunteered by clients, provided prospective clients great reassurance. First purchases range from $200 - $1000, but average $232. Second purchases average $588. Once the initial hurdle is jumped and trust secured, clients are willing to risk a bigger chunk of their wallet. 

Have you a means to establish virtual credibility? Have you customers who are willing to generate that credibility? Have you a means to secure trust? Have you a "sample" of your product that can be shipped to prospective clients?

Given your price point, I'd guess that no amount of vlogging will overcome initial hesitation. Especially with regards to individuals. However, companies that are repeat buyers would likely appreciate the convenience of an e-commerce option. But guesswork is expensive. Have you surveyed your prospective clients? What were their responses?

On Sunday, 19 April 2015 20:01:30 UTC+7, Claudia NG wrote:

[Claudia NG]

Hi Janice,

Thank you for your insight and taking the time to share the experience of your company.

It is indeed impressive!

I suppose the problem we face now or rather the hypothesis I am trying to validate is "have any online store has a deal fall through simply because there is no physical location for your customers to purvey the goods before committing?"

As you rightly put, our experiences with enterprises have been far more encouraging. I suppose this is due to the nature of enterprise engagement. Most of the deals are not touch-and-go. We invest the time, demo the products, etc. 

I suppose the hurdle comes from the consumer side. We did our market research prior to the decision to just operate an online store vs a brick and mortal store. In fact, there are many sites out there in the market now, selling the same kind of items at that price point (USD20K and above), operating purely on an online basis. We have previously bought from these sites as consumers and never a time were we worried about the integrity of the company.

The happy "problem" was that our online marketing efforts was gaining traction and generating a lot of interest and enquiries, but whenever we mentioned that we do not have a physical store, it seemed to us that people get turned off and we lose the customer. 

That was the reason I started the thread here. To hear from folks who is running a 100% online business if they have had the same experience.

I am glad to hear it worked out for you, but I'm wondering now if it is a specific cultural behavioural phenomenon? 

Are Singaporeans - due to our small land mass - so used to going to a physical shop (simply because it is typically a 20mins drive away) that the convenience of online shopping and completing the entire process online is not as appealing as their need to see, feel and touch a product before a purchase is finalised?

I suppose that is the question at hand now. 

Cheers,

Claudia

On Tue, Apr 21, 2015 at 8:10 AM, Janice <janice...@mac.com> wrote:

As a bit of background, we sell human hair products. Average spend per purchase is $447. Number of purchases per year is 2 - 5. I think it's also important to note that most of our clients are end users based in Western countries and are largely unfamiliar with Cambodia, our home base. 

We're 100% online. And given our client's average spend, I think that's a helluva feat. We overcame reluctance via the great equalizer, otherwise known as social media, and a qualitative product. Video testimonials, volunteered by clients, provided prospective clients great reassurance. First purchases range from $200 - $1000, but average $232. Second purchases average $588. Once the initial hurdle is jumped and trust secured, clients are willing to risk a bigger chunk of their wallet. 

Have you a means to establish virtual credibility? Have you customers who are willing to generate that credibility? Have you a means to secure trust? Have you a "sample" of your product that can be shipped to prospective clients?

Given your price point, I'd guess that no amount of vlogging will overcome initial hesitation. Especially with regards to individuals. But companies that are repeat buyers would likely appreciate the convenience of an e-commerce option. But guesswork is expensive. Have you surveyed your prospective clients? What were their responses?

On Sunday, 19 April 2015 20:01:30 UTC+7, Claudia NG wrote:

Dear OpenFroggers,

I have recently started a company dealing with Unmanned Aerial Vehicles.

Part of the business includes an online shop front. 

However, we realised that while customers were enthusiastic to engage online for general enquiries, they were reluctant to close a deal if they couldn't touch and view the item first in a physical brick and mortar shop.

I am wondering what is the experience of the folks here who run ecommerce store?

Do you guys face the same problem?

How do you mitigate it? 

Also, if you were the shopper, do you prefer to buy online/offline? If so, why? Is touching/seeing the product important to you in determining your decision to buy from one merchant vs another (assuming prices are similar)

I would be really happy if some of you can share your experience/personal preference.

Thanks all in advance!

Claudia

[Niall G]

Claudio, 

A dated example, but it might be relevant - Sony always had high street stores and accepted they were loss leaders to online purchases, because of customer's need to 'touch and feel (presumably also hear)' the products before buying. I expect the Apple Store strategy explains a similar phenomenal success story. This might not help you much if you don't plan/can't afford to be a retailer, but allowing potential customers to experience the UAVs, how they fly, sound, how easy they are to operate etc, maybe via an online video, exhibitions, trade shows etc might close the gap?

Hope this helps.

Niall

Sent from my iPad

You received this message because you are subscribed to the Google Groups "OpenFrog" group.

To unsubscribe from this group and stop receiving emails from it, send an email to openfrog+u...@googlegroups.com.

[Claudia NG]

Hi Niall,

Thanks! I totally agree with you.

To make up for the lack of a brick and mortal storefront, we are going the route of producing lots of content online eg. unboxing videos, build videos, footage from flights etc. 

That is for products which might not be very well known yet in the market. 

However, some of the copters carried by us is already well known and marketed in the consumer space, and clients are well informed of what they can and cannot do.

Example of a scenario (which happens too oftern)

Client : Hi, do you have stock of item A?

Us : Yes, we do.

Client : Oh, can I come to your shop to see the product?

Us: Sorry, we are a webstore and do not have a shopfront for you to visit.

Client : Oh. 

After that, we assume the client just goes to a brick and mortar shop which carries the same product and the sale might be completed elsewhere. Which is a bummer.

That is the reason why I started this thread. I am wondering if other ecommerce site owners face the same issue, or is it just exclusive to us. 

[Roland Turner]

Hi Claudia,

Do you have any evidence that "producing lots of content online eg. unboxing videos, build videos, footage from flights etc." increases propensity to purchase from your site? How are you measuring that? What are your results? Who else (apart from press) is talking about how awesome you are? Who have you helped to solve their drone-related problems? Are they explaining how you helped and singing your praises on your website? What about their websites/Twitter feeds/YouTube channels/etc.?

More broadly, I don't get much sense of who your intended customers are (granted, I've only skimmed most of the thread so may have missed this), nor what you're doing for them that they can't do better - and with more confidence - by purchasing from an Amazon Marketplace seller. If all that you can say about them is that they are English-speakers in south-east Asia who happen to want to purchase a drone in the $2,000-25,000 price range then I'd suggest that you're aiming far too broadly at present. What are your odds of being the majority or sole supplier of drones to that market within 6-12 months? I suspect that even with your narrower regional and price-range focus (vs. Amazon's $20-$96,000 and global), your odds of doing so are still woefully poor.

- Roland

[Benjamin Scherrey]

You don't have to invest in a brick & mortar store in order to get your customers with a hand's on experience. You could try to announce pre-scheduled demo/buyer days where you will be at a certain location and fly the product in a live demonstration. Organize this as a community event to encourage other owners to come fly as well and then you'll have a chance at getting a captive market. If you stock inventory then you can take it with you in a van - otherwise offer some kind of discount for people who attend and buy/make a deposit at the event - as appropriate. 

Should be minimal cost and if you do this on a regular basis and people know this will happen on a regular basis then you've established a lot of the credibility that a retail store provides without paying rent. 

best of luck,

  -- Ben

--

Chief Systems Architect Proteus Technologies

Chief Fan Biggest Fan Productions

Personal blog where I am not your demographic.

This email intended solely for those who have received it. If you have received this email by accident - well lucky you!!

[Niall G]

Nice post - how're things?

Sent from my iPad

On 22 Apr 2015, at 7:45 pm, Aurie Philipchuk <aurie.ph...@gmail.com> wrote:

Have you ever though of using a different shipping/returns policy?

Purchasing shoes used to be something that you wouldn't dream of doing online. Well, not until Zappos came along. 

Look at this policy: http://www.zappos.com/shipping-and-returns - free shipping & 365 day return policy.

They play the numbers by making it as easy as possible to get things into the consumers hands.

If there isn't a good brick and mortar alternative for drones (which there certainly isn't in comparison to shoe stores), those are good odds.

[Claudia NG]

Hi Ben,

Thanks! I totally agree with you! All the plans you suggest is actually in the works, and once our inventory arrives, we will be using social media to broadcast our activities to get a community going. Hopefully, when people can put a face to a name, trust issues will be capped to a minimum and we can start building our referral business as well. Thanks for the luck. Always needs it. :)

[Claudia NG]

Hi Aurie,

That is a brilliant idea. Definitely food for thought. :)

On Wed, Apr 22, 2015 at 8:45 PM, Aurie Philipchuk <aurie.ph...@gmail.com> wrote:

Have you ever though of using a different shipping/returns policy?

Purchasing shoes used to be something that you wouldn't dream of doing online. Well, not until Zappos came along. 

Look at this policy: http://www.zappos.com/shipping-and-returns - free shipping & 365 day return policy.

They play the numbers by making it as easy as possible to get things into the consumers hands.

If there isn't a good brick and mortar alternative for drones (which there certainly isn't in comparison to shoe stores), those are good odds.

On Sunday, April 19, 2015 at 9:01:30 PM UTC+8, Claudia NG wrote: