Decision-Making in Global Markets

The branded product/company I wish to discuss further is FinalMouse’s Ultralight 2 – “Cape Town.” Their first product, Classic Ergo 2016, was riddled with supply chain issues that have continued to follow the company since its inception. I chose to take a somewhat closer look at this company because they are the antithesis of the omni-channel business model. The company is hard to properly research for discussion purposes; most information online is simply criticism from customers. Yet, when they release a new product, they always sell out.

FinalMouse isn’t accredited with the BBB, and as of 2/01/2020 they have a grade of “F” on the website. Most feedback channels you will find for customers who have purchased a FinalMouse are through third party social media websites such as Reddit, YouTube, or Twitter. One customer review on Reddit states that they received a “blood-pressure cuff” instead of their actual purchase, a PC gaming mouse (Precourser, 2020). It almost sounds too ridiculous to be true, but fellow customers posted their support for the individual because of their shared terrible experiences.

The process of purchasing a FinalMouse starts and ends with their website-most of their marketing efforts are through word-of-mouth or influencers in the PC gaming space. Thus, their sales are almost completely single-channel online (with an occasional “pop-up” event). The most recent product, “Ultralight 2 – Cape Town” sold out almost instantly and hasn’t restocked since (released in November 2019). One could argue, at this point, that the exclusivity of owning a FinalMouse is part of their business model. Some customers have gone as far as to buy their products and proceed to resell it with a large mark-up on Amazon or eBay.

The lack of touchpoints with FinalMouse results in a significant amount of negative feedback. Customers have complained of terrible turn-around times-potentially due to a lack of manpower in the customer support division. Their online presence is isolated to their Social Media profile on Twitter, as well as their subpar customer support via email.

Surely, FinalMouse is not creating any meaningful level of customer or brand loyalty. The WhitePages article states that it is important to concentrate on customer-specific requirements and lifestyles by creating a unique customer experience (Kourimsky, 2014). The only thing “unique” about this company’s created experiences is what type of debacle has befallen each customer. All these things considered; their products continue to sell out. This is most likely because their products are surprisingly high quality, as well as the artificial  demand the company creates. FinalMouse consistently creates artificial demand (either intentionally or unintentionally) by being perpetually understocked.

For the vast majority of retailers, the unpredictability of online ordering results in companies broadening their portfolio of products and availability (Kourimsky, 2014). This hasn’t been the case for FinalMouse. Whether this is the result of gross incompetence or a shady business model, the company continues to drop new products that sell out instantly and ship at a painfully slow rate to customers.

The primary learning point I took away from the WhitePages article is that in today’s technological age of instant satisfaction, customers are increasingly more demanding of the retailers that they do business with. Because of this, retailers are inevitably forced into an omni-channel approach to remain relevant.  The evolution of multi-channel to omni-channel retail starts with the supply chain. Giants such as Amazon lead the way on omni-channel distribution efficiency, satisfying the demands of modern customers swiftly. One of the biggest “turn-offs” for a modern-day customer is when the product they want to buy is out of stock. This can result in four typical responses. They could buy a substitute product (same or different brand), postpone the purchase, resign the purchase, or buy the product from another retailer. Three of the four outcomes will result in a loss of a sale for the company. Even if the customer decides to purchase a substitute product, they will most likely still consider it a negative experience.

One of the biggest steppingstones for multi-channel retailers into the omni-channel sphere is significant supply-chain improvements.  The aforementioned issue with retailers running out of stock can be directly caused by poorly managed omni-channel processes. For instance, consider an example of a customer purchasing a game online from the mega-retailer BestBuy. After he has already paid for his order and was given a ship date, he assumes the process was complete. However, due to an internal issue with BestBuy’s stock management system, he later receives an update that his order has not been processed and will not ship. Omni-channel stock management is an extremely complex process; it requires many different system(s) across the company to touch quickly without error. Minutes or even seconds delay between two retail stores or two warehouses can cause a disgruntled customer and may cost the company return business.

Another takeaway from the article involves a reduction in brand loyalty. Whether it be due to discounts, convenience, customer service, new product offerings, or something else entirely, there is always a way that a competitor can catch a typically “loyal” customer’s eye. This could certainly be considered a double-edged sword. Retailers and brands should be attempting to gain a new loyal customer for each they lose to a rival. The modern customer requires their needs to be met quickly, which means retailers who accomplish this have a higher chance to retain their business than competitors whose supply chains may be struggling.

The distinction between multi-channel and omni-channel retailers was outlined succinctly in the WhitePages  article.  This explanation ties into the previously discussed points where issues arrive in the supply-chain. Companies used to treat channels as individual streams of revenue; in today’s market, it is becoming necessary to merge them. Otherwise, issues will continue to arise from the top of the supply chain down to the final delivery, whether that be the customer or the brick-and-mortar store. The modern customer expects their experience with the retailer to be the same no matter what channel they use.

The final discussion point of the article that I think is important is the hybris intelligence platform. This groundbreaking solution is exactly what large retailers need to smoothly transition from multi to omni-channel retailers. The hybris platform should solve a multitude of issues retailers are dealing with constantly. The Best Buy customer from earlier, for example, wouldn’t have run into any trouble with the shipping of his product. In theory, if hybris works as described, it will save massive retailers from supply-chain stocking issues.  Imagine if Target Canada, for example, had been able to utilize hybris successfully. Of course, it wasn’t established then, but it could have saved the company from a massive blunder. 

Amazon has a unique approach to its management of inventory. To avoid “no stock available” turning potential customers away, the company places goods into bins immediately on arrival. This means sorting takes a back seat, prioritizing storing freight before sorting it. This process slows the sorting phase considerably, but it is an insignificant amount of time compared to the sales boost the company receives from having goods readily available for order. The WhitePages article contrasts Amazon’s efficiency by stating that it can take up to three days for an average automobile spare-parts distribution center to move items from receiving to storage (Kourimsky, 2014). In summation, Amazon reduces front-end labor to increase customer satisfaction and drive sales.

Nebraska Furniture Mart is an excellent example of a retailer who is improving the customer service experience in an omnichannel environment. The company began from the ground up in 1937, when an ambitious immigrant named Rose Blumkin borrowed $500 from her brother to purchase furniture. Her starting business plan was simple, purchase at 5% over wholesale and sell at a 10% mark up while taking great care of her customers (Johnson, 2019).  By 1983, the company was the largest furniture mart in the United States. Rose would sell the majority stake in her business the same year to Warren Buffet for $55 million.

Nebraska Furniture Mart recently expanded to the Dallas area, opening its largest retail space to date in The Colony. The store amounts to 560,000 square feet of selling space for DFW customers to peruse a diverse variety of products. One of the major reasons Nebraska Furniture Mart is onboard the revolutionary omni-channel business “train” is because the stores are connected to their warehousing. The Colony’s Nebraska Furniture Mart is a massive compound, with their attached warehouse amounting to an additional 1.3 million square footage. This colossal amount of storage assists in the location’s ability to make sure their customers are instantly gratified. The company even has a fleet of delivery trucks to cut costs for the customer and deliver goods on time. Nebraska Furniture Mart shoppers can have their product delivered to them even if they live out of state from brick-and-mortar store locations, delivering to all states in the continental U.S except California. Additionally, the company often promotes random free-delivery weekends. These  events directly drive sales  and increase customer satisfaction.

One major touchpoint that Nebraska Furniture Mart has developed to create a seamless shopping experience for their customers is their mobile app.  A key feature offered on NFM’s app supports the customer searching for a product by guiding them to it inside the store. For such a massive sales floor, an application like this can be extremely helpful for customers who are not yet familiar with the store layout. This feature can give the company direct information as to what their customers are interacting with most frequently within their store, boosting their CRM information pool (Taylor, 2014). Of course, only a small percentage of NFM’s customers will utilize this feature, but any data provided will greatly benefit the company. NFM’s analysts can use this information to improve their store layout, adjust pricing, or even send targeted marketing to specific individuals. In contrast, a multi-channel approach would lose the opportunity to collect said information, as the two “heads” of the customer’s touchpoints would have minimal to no referenceable interaction.

Another feature of NFM’s mobile app involves scanning a product bar-code for instant information such as customer product reviews as well as specs. In the omni-channel verse, Nebraska Furniture Mart understands that customers have access to comparative information at the touch of their fingers, so why make it difficult? Both the modern shopper and NFM understand the significance of product feedback. Empowering modern shoppers to access reviews seamlessly  improves the customer’s shopping experience.

Nebraska Furniture Mart’s website also goes above and beyond to satisfy the omni-channel contemporary shopper. A variety of additional services are offered, such as customer, credit and interior design related support. The website boasts a feature known as the “Room Planner”, which assists the customer in creating a blueprint of their dream room. Once dimensions are chosen, the  website walks you through the process of filling out the room with furniture, allowing you to browse through NFM’s product catalogs.  Once the furniture has been placed, you are given the option to print or email the final product. Finally, the customer can order the goods online, or bring the result to their local NFM to complete the purchasing process.

Nebraska Furniture Mart hosts frequent events for its customers to participate in. These vary greatly in scope, with events such as mock game-shows, arts and crafts, and even baby crawling races (winners receive various toddler related products). Event marketing can help companies achieve various corporate objectives (brand awareness, corporate image, community involvement), marketing objectives (positioning, improving sales, reaching target markets), and media objectives (generating publicity, generating visibility, enhancing ad campaigns) (Zarantonello, 2013). These initiatives help the company drive customer engagement through multiple different avenues.  Event marketing drives word-of-mouth organically, giving the company the ability to increase potential sales and improve localized corporate image simultaneously.

While Nebraska Furniture Mart may not have the same level of reach as massive competitors such as IKEA, they are nonetheless making great strides as an omni-channel retailer in the United States. Their efforts and initiatives have shown verifiable results, with the company swelling to $102.6 million in online sales alone in 2016 (from $32.7 million four years prior).  Nebraska Furniture Mart has shown that it understands the value of making the purchasing process as easy as possible on their customers. Whether it be through online blueprint software, mobile app shopping assistance, on-site shipping, or financing and credit assistance, the company pushes to exude convenience. With multiple customer touchpoints that help drive sales, it is no surprise the company continues to show consistent growth. As customer loyalty dwindles and omnichannel business models grow, it is important to note that loyalty isn’t  “dead” as a method of attack for a retailer.  Perhaps, companies make the mistake of assigning too much weight to loyalty being based on the end of the process, or the customer’s end purchase. In reality, it is the experiences the customer has with the retailer as well that drives consumer loyalty. Providing features such as the ones discussed above drive a positive shopping experience, which directly contributes to customer retention. 

My personal experience as a customer at Nebraska Furniture Mart has always been excellent. When the company announced they would be expanding to Texas, I heard about it on the local news. The first time I went to Nebraska Furniture Mart, I went just for fun, because I knew it was the largest store in Texas. As a broke undergrad student at the time, I placed considerable value on free entertainment. I went the day after the “grand opening” event just to have a look around and was extremely impressed. It was by far the largest store I had ever been into, and its open floor plan and large panel windows gave the building a beautiful amount of natural light.  A couple of years later, I would return to make a large purchase that would result in becoming an NFM customer for life.

My fiancée and I decided it was time to buy our first expensive, high-quality, mattress. First, we looked around in local mattress stores. As we live in North Fort Worth, The Colony was quite a drive, so it wasn’t  the first consideration. A reoccurring theme that bothered my fiancée and I was the aggressiveness of the sales force at some of NFM’s competitors. In Mattress Firm and Rooms-To-Go, we were immediately descended upon by a sales associate. These employees were not rude, per se, but simply over-enthusiastic. As an introvert, I don’t enjoy when sales personnel shadow me and attempt to make constant small-talk about their product offerings. Eventually, we got tired of going to these smaller mattress stores with less selection and decided to drive to Nebraska Furniture Mart. I did a quick online search of their products and found that they were offering a free-delivery promotion. With that in mind, we set off to shop at The Colony’s location.

I had no preconceived notions about how affordable the mattresses would be at NFM, but upon arrival, I was presently surprised. The three driving factors behind our final purchase decision ended up being price, convenience, and customer service. They had many major mattress brands at a steep discount. When browsing and sitting on the occasional mattress, my fiancée and I were approached by an NFM employee. They introduced themselves and let us know where to find them if we needed anything. Surprisingly, they gave us some space after that to do our shopping. Once we narrowed it down to two mattresses, we spoke with the employee again to inquire about the features of a particular adjustable frame. They were extremely knowledgeable, kind, and to the point. In the end, we decided to purchase the mattress along with the adjustable frame. A few days later, the products arrived at our house and were put into our bedroom by a pair of friendly shipping/moving employees. They asked us where to place the items, set them up, and were out of our hair in 30 minutes.

The reason I have such high regard for Nebraska Furniture Mart as a company is primarily because of their employees. The individuals that I interacted with were friendly, but not pushy. They were experienced, but not sassy. Ultimately, what one customer values over another is what drives their associations with the company. For me, it was my shopping experience. Nebraska Furniture Mart stores make you feel like a kid in a candy store- the variety of offerings they have in their location in The Colony borders on ridiculous. Perhaps, this is why they appealed so greatly to me on my initial visit. This retailer checks all the boxes for the modern brick-and-mortar shopper by satisfying the need for instant gratification via direct-from-site shipping and providing a seemingly unlimited amount of product offerings. From that purchase onward, I haven’t considered shopping for furniture with any other competitor. That said, I do research pricing first, as affordability plays a major role in my final purchase decision. Due to my loyalty to the retailer, Nebraska Furniture Mart’s website is the first one I check.

REFERENCES:

• "Precourser" (2020). Final Mouse Order Thread(ALL FINAL MOUSE ORDER ISSUES GO HERE, late, broken, or otherwise) : MouseReview. [online] Reddit.com. Available at: https://www.reddit.com/r/MouseReview/comments/7xcjrn/final_mouse_order_threadall_final_mouse_order/ [Accessed 7 Feb. 2020].
• Kourimsky, H. and van den Berk, M. (2014). The Impact of Omni-Channel Commerce on Supply Chains. [online] Itelligencegroup.com. Available at: https://itelligencegroup.com/wp-content/usermedia/WhitePaper-ImpactOfOmnichannel.pdf [Accessed 1 Feb. 2020].
• Frontoni, E., Marinelli, F., Rosetti, R., & Zingaretti, P. (2017, February 1). Shelf space re-allocation for out of stock reduction. Retrieved from https://www.sciencedirect.com/science/article/abs/pii/S0360835217300402?via=ihub
• Johnson, D. D. (2019). International directory of company histories. Farmington Hills, MI: St. James Press, a part of Gale, a Cengage Company
• Taylor, D. G., & Levin, M. (2014). Predicting mobile app usage for purchasing and information-sharing. International Journal of Retail & Distribution Management, 42(8), 759-774. doi:http://libproxy.library.unt.edu:2126/10.1108/IJRDM-11-2012-0108
• Zarantonello, L., & Schmitt, B. H. (2013). The impact of event marketing on brand equity. International Journal of Advertising, 32(2), 255–280. doi: 10.2501/ija-32-2-255-280
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