Tuesday, 6 November 2012

Comet Failed to Connect Dots with Their Multi-Channel Strategy


The news that British high street retailer Comet has entered administration is another major blow for real world business, but it is not a major surprise.

Many are quick to point the finger of blame at the Internet for the store’s demise, but this cannot solely be the cause. Comet was itself a major online retailer, operating several well-developed online channels, including an end-of-line auction site, a content-led community site and a number of stealth-branded discount sites, taking the competition directly to the low-cost, online-only market.

The Comet business had many faults but perhaps it biggest failing was its lack of strategy in connecting its high street and digital properties.

I only have one memory of buying from Comet. It was a horrible experience (shared in the post below), which did more to prevent me from ever entering a Comet store again than any of their Internet-only competitors’ efforts. If you recognise any of these failings in your business, take this as a lesson and change quickly or risk sharing Comet’s fate.

4 Multi-Channel Mistakes That Made Me an Ex-Comet Customer

We were shopping for a new dishwasher. It had to be an integrated model to fit our kitchen which would limit our choice and be more expensive than a standard machine (and at the time price was definitely an issue).

Mistake #1: As with most purchases made in our house it all started with a Google search. We clicked on several paid links from a number of major high street retailers and online-only brands. We selected a couple of products we were interested in and then juggled the pros and cons of buying from a name we knew (i.e. Comet) and a brand we had never heard of. Unbeknown to us at the time, the discount retailer we had short-listed was also operated by Comet. Essentially Comet was competing against itself for our purchase and I should commend the discount-brand for doing a fine job in contributing to the perception that bricks ‘n’ mortar stores (that don’t compete on price) offer savvy shoppers very little in terms of value. To make matters worse for Comet, the cost of acquiring me as a customer would also have increased dramatically, as I had clicked on both stores paid search ads multiple times. It is one thing to sell using multiple brands if you want to separate end-of-line and distressed inventory from your premium stock or target very different audiences like Littlewoods do with their Very and ISME brands. But to undermine your core business by offering the same stock at discounted prices and add to your marketing costs at the same time seems more than a little na├»ve.

Mistake #2: Unable to decide which model we should purchase, we decided to visit a Comet store for some much needed advice. We hung around by the dishwashers for a period of time before we were able to attract a sales advisor’s attention. He promptly told us that there wasn’t much demand for integrated machines and so they had nothing in stock, suggesting instead that we look online and leaving us to fend for ourselves once again. In little under a minute he had lost a sale. If he had been able to show us models that were available via the website (or even a catalogue) and explain in more detail the benefits of each model, we would have probably ordered one there and then, justifying (in a small way) the existence of the large, expensive showroom and giving the sales advisor the opportunity to pitch their extended warranties and perhaps earn a commission.

Mistake #3: Returning home, and vowing never to buy from Comet again, we went straight to the discount retailer (via a paid search ad, again costing Comet more money) and bought one of the machines we were originally looking at. We also paid extra to have their delivery company dispose of our old machine. When the new machine was delivered in a Comet delivery van we felt slightly duped. When the Comet delivery man told me that he had no notification to remove the old machine, I was more than frustrated. I was forced to keep them at the front door and prevent them from driving away while booting-up my laptop to find the email confirmation of the transaction. I don’t know if the instructions were not passed on to the delivery team or they were just trying to get out of taking my old machine, but there was no apology and only after comparing his paperwork to my email for a significant period of time, was the old dishwasher grudgingly removed.

Mistake #4: Now I’ve got a fairly short memory. My experience with Comet had not been a good one but being a price conscious shopper, they could have lured me back with something as simple as a great deal. The problem was they just didn’t seem interested. I never received a single email communication from them beyond the standard order confirmations. The fact that I had clicked on their paid search ads multiple times probably meant they didn’t make much money (if any) from my initial purchase. A simple email or piece of direct mail could have given them a cost effective opportunity to attempt to win me back as a customer and perhaps see a return from their initial investment. Well, I guess it’s too late now.

Conclusion

Comet had invested in what they believed was solid multi-channel strategy but had failed to connect the dots. In my experience, the stores didn’t speak with the online operation, the online operation didn’t speak with the delivery team and the marketing team didn’t speak to me as a customer. I don’t know whether it was arrogance, ignorance or just a lack of basic common sense in their management – but surely Britain’s biggest brands are smarter than this. The evidence tells us a different story. 

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