How the Big Boys Chase Innovation

On day two of the Retail Marketing Conference in Orlando, Fla., last month, a panel of executives from Best Buy, Dell and 1-800-Flowers.com took part in a roundtable discussion on how their businesses have evolved their brand, e-commerce and marketing strategies to differentiate themselves from their competition through innovation.

Panelists included Mark Mosiniak, senior director of business development at Best Buy; Dell's Global Head of Online Merchandising Marissa Tarleton; and 1-800-Flower.com's Senior Vice President David Siegel. The session was moderated by Dale Nitschke, CEO of Ovative/Group, a digital marketing consulting firm, and former president of Target.com. Here's a taste of what was discussed.

Mobile Opportunity
Mosiniak said it wasn't a big secret why Best Buy entered the mobile space — it saw a potential for profitability. But to make it profitable, Best Buy had to invest in people — both employees and consumers — and partners. That included learning from consumers how it could make mobile better. What Best Buy heard is now incorporated into the company's offering: straightforward pricing, knowledgeable sales staff that are available to answer consumers’ questions and a commitment to be there for the lifetime of the phone — in good times and bad.

For Dell, there are two ways the company makes a commitment to innovation. The first is organizationally, where Tarleton reported that 30 percent of her team's sole responsibility is looking for ways to change the business for the better, while the other 70 percent runs the day-to-day operations. The second way is by listening and reviewing customer feedback, which Tarleton said involves her devoting time each day to reading every piece of feedback she gets from customers.

Budget for Innovation
“If you don't budget for something, it doesn't happen,” said Siegel. “Budget for innovation.” On a monthly basis, four to five ideas are pitched to senior management at 1-800-Flowers.com. If even one of those ideas works out, "we're ecstatic," Siegel said, noting that the company has launched dozens of websites that have failed. That culture of innovation has helped 1-800-Flowers.com to be the first company to use an 800 phone number, the first merchant on AOL and the first company to complete a transaction on Facebook.

In regards to its social media and mobile efforts, 1-800-Flowers.com has launched Celebrations.com, a pure content site designed to engage consumers while subtly introducing its brand. Understand the strengths of each social media platform, Siegel said, noting that 1-800-Flowers.com uses Facebook for marketing and Twitter for customer service purposes. The company also offers apps on BlackBerry, iPhone and Android mobile phones.

“Have dedicated ownership of your social media efforts,” Siegel said, “and provide content driven by what your customers want.”

Three Perspective View
Best Buy's biggest advantage is that it can learn from the mass of customers and employees it has, said Mosiniak. To that end, senior management views the company from three perspectives — shareholders’, customers’ and employees’. For example, to better serve customers, the company has instituted an “In-Store Walk Out Working” program, where it sets up customers’ BlackBerry phones before they leave the store, ensuring the proper user experience.

Another example of Best Buy's commitment to innovation and serving its customers is a service that it's created to save/replace software stored on phones (e.g., phone numbers, text messages, pictures, videos), which consumers most often complained about when their phones were broken.

To tap into employees’ knowledge, Best Buy has launched Twelp Force, a service where employees offer tech advice to consumers on Twitter. Blur the lines between customer service and marketing, said Mosiniak. Best Buy does this with tips and tricks’ videos on its website. For example, an employee may post a video on how to use all the capabilities of a smartphone.

Personalization, Relevance, Solutions
These three words represent Dell's vision for e-commerce, said Tarleton. With an online presence in 166 countries, Dell serves a diverse and widespread customer base. To make their experiences as personal as possible, Dell's website is available in 134 languages. It was also one of the first companies to launch online communities and online support, and creates interactions with its customers where they are — e.g., Twitter.

To create relevant personal experiences, Dell forms profiles of its customers and then targets them with particular products based on those profiles. Those profiles are partly based on the more than 2 billion conversations Dell has with its customers each year. The company's philosophy is to listen to what customers have to say, then filter suggestions back to senior management.

An example of a solution from Dell is IdeaStorm.com, a website it created solely for the purpose of collecting customer and employee feedback. There's also a program where small businesses can apply to spend time with the company's founder Michael Dell, where he can provide them with his expert advice.

Dell's goal for the future is to change the conversation from transactional to conversational, said Tarleton. That means building up content that adds value for customers, and allows them to interact with each other.

Last Thoughts
Here are some final thoughts from the panelists offered in a brief Q&A session:

• Customers' propensity to buy is moving closer to holidays/events, said Siegel. Therefore, make sure you have operational support in place for quicker deliveries.
• You have to fail sometimes to move forward, said Mosiniak in regards to Best Buy's philosophy on innovation.
• To measure the ROI of a Twitter campaign, set a promo code and then measure the number of sales with that promo code, Siegel said.
• Set expectations, then be transparent with your results to customers, said Tarleton on social media marketing.