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The four corners of commerce

03 Nov 2020  |  Danny Donovan 
The four corners of commerce

In advance of Mediatel’s Future of Brands: Ecommerce this week, MediaHub’s UK CEO Danny Donovan assesses how the four corners of commerce impact our everyday retail behaviour

Even with a new lockdown in place, we are about to enter the fiercest retail period of the year.

If you’re a commerce brand, whatever you are selling, assuming you still can, there are four critical factors you need to consider. Because your customers do.

Very recently I spotted a gash in the side wall of one of my mum’s car tyres. She lives alone as my dad died a few years ago, so that means I got the job of sorting a replacement.

She doesn’t live far from me and I’m a big fan of supporting local businesses. So my first port of call was the independent garage and tyre specialist around the corner, who as well as tyre replacement have handled everything over the years from the simple MOT - where they would rather replace a broken number plate bulb for free than fail the car, giving us both the bother of a retest - through to swapping the engine in my sons first car (not for free this time sadly) when he blew the head gasket (twice).

They even lent tools and ‘kind words of encouragement’ to me as an amateur mechanic when my very old Land Rover refused to start in front of their workshop.

They are proper gritty South London salt of the earth and don’t suffer fools gladly, but all in all they are good, hard-working, local people and deserve my custom.

But on this occasion they fell foul of the golden rules of retail. The 'Four Corners of Commerce': convenience, community, colleagues and of course, cost.

Convenience

This is not about convenience stores or convenience products. This is about, "Can I get the product I want, when I want it, through the channel that best suits me at that moment?” And this last element is the most important.

Convenience will mean different things to different people of course, but it will also mean different things to the same person in different situations, even if it’s for the same product. Classically of course, when you have run out of something versus when you are thinking about shopping for the next week.

Or in this case, when you are trying to get your mum back on the road.

Community

Community, in the world of commerce, operates on three levels. First and most obvious is your physical community, mostly associated with the local community around a retail outlet for instance.

Next is your virtual community. Social media groups, or loyalty card holders.

Lastly, the global community. What good (or bad) is your company doing to the planet and its inhabitants. Not just the environmental agenda, but spanning inclusion, health, poverty, etc.

Colleagues

These are the people who embody your brand and are the people most frequently in contact with the customers. They are your greatest asset, hopefully your greatest ambassadors, and therefore your most powerful media channel.

As such, colleagues is most obviously associated with store staff or delivery people. But it is much broader than that, including the colleagues in the supply chain or at the warehouses and picking centres, or in the customer service centre, making sure the products are the best they can be and arrive in the store or with the customer on time.

At the extreme end, in the case of eBay for instance, the colleagues don’t work for the company itself. They are the thousands of sellers using the platform, all of whom pay to be there but sign up to a code of behaviours in the way any colleague does.

Cost

"No, it’s about value!" I hear you all scream. Of course, you are absolutely right, but ultimately everything has a cost, and every customer uses their own unique value equation to determine, alongside a myriad of other factors, if that is the right product for them at the right price.

So cost is absolutely a function of product quality, attributes, desirability, need, availability, accessibility, environmental impact, convenience and occasion. But ultimately, is it the right cost?

It doesn’t matter what kind of commerce business you run, pure e-commerce, bricks and clicks, or physical only (more of these still exist than you think, by the way). These four things are considered by every customer every time they make any type of purchase.

That is not to say you have to score 10 on all counts, but you have to do some things very well and not be disastrous on anything.

So, my enquiry call to the ‘friendly neighbourhood’ garage was followed by a call straight back from the wife of the head mechanic, and therefore co-owner, quoting a cost for a direct tyre replacement - fitted ‘with a smile’ - for £110.

That didn’t sound too bad, but it was worth a bit of shopping around as this was my mum’s money. “While I can still pay Dan, I will, ok!"... "Yes ma!”. Always in cash. What am I going to do with that these days?

Plus, needing to get the car back on the road quickly meant a trip to the garage, which although only a few hundred yards, would mean a short break from my working from home regime.

Given how conscientious I am, this led me to check out mobile tyre replacement services. The cheapest of these actually came in at a lower price than the local's, even with the £28 call out charge - but what sort of son would cost his mum £28 just to save himself a trip?

So a five minute online search later, I paid £67 for the exact same tyre at a major chain 15 minutes’ drive away - who I had heard of but never used before, bought and paid for online, with an appointment at a time selected by me (before work hours!).

So back to the four corners of commerce…

The local garage. Eight for convenience, 10 for community and let’s call it an eight for colleagues, but in this case, a 50% premium - even understanding that it can’t compete with the buying power of the big boys - meant it scored very low on cost. Let’s call it 28/40.

The mobile fitters. 10 for convenience, pretty low for community, colleagues unknown (coming to my 77-year-old mum's house), and let’s give it a six for cost. So it's not getting the business this time. 26/40.

The big chain, booked online with a relatively local centre. Eight for convenience, six for community (as it was only a couple of miles away, but it was a big chain), seven for colleagues (as they would inevitably be from the area and would probably have some form of NPS score to keep them focussed). Then, obviously, 10 for cost. 31/40.

Decision made, tyre fitted, mum happy and back on the road, cash in wallet for the next six months.

Every customer, every purchase and every occasion is unique, but they all have these four critical factors in common.

As such, all commerce brands need to be clear on what they stand for, what they're best at, where they can win and, just as importantly, where they could lose.

Figure that out, and you'll stand a far better chance of winning over customers during this year's locked down Christmas period.


On Thursday November 5, the Future of Brands: Ecommerce conference will feature speakers from Maplin, Diageo, Cox & Cox, Astrid & Miyu, Tata Consumer Products, eve sleep, RB, Organix Brands, Marie Claire and more. Find out more and register for FREE here.

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