The Retail Puzzle


At the start of the year I spoke on a panel at CES.  If you don’t know it, it is the Consumer Electronic show–one of the largest conventions in the world with 2.2 million square feet of space and 170,000 attendees.  I was blown away by the amazing technology as I spent days attempting to quickly walk the exhibition floor.  My first thought when I saw this amazing technology was, thank goodness people work on what they want to work on, and building drones and 3D printers is more fun than digital marketing or I would be out of a job.  There are literally millions of brilliant people working on really cool technology that the world does not need–we don’t need fifty companies making 3D printers.  I had a similar experience at NRF (National Retail Federation’s expo) seeing the countless companies building facial recognition and electronic changing room mirrors that you can communicate with.

With all of this technology, you’d think we had covered it all.  Or at least the important stuff.  Not even close.  Unfortunately, the most important problems aren’t always the most fun problems to solve.  Numerous people have commented on the lack of technology to help reduce climate change, poverty, hunger, etc.  While these problems facing humanity are clearly of the utmost importance, there is also an important business problem that was not addressed at either expo or in the countless presentations and articles I have read about on the future of retail.  That missing piece is the connection between offline and online.

Retail is obviously a huge industry (1 in 4 or 42 million US jobs, 3.8MM stores, $2.6 trillion or 11.6% of GDP).  Not to bore you with statistics, you will trust me that hospitality (hotels and restaurants) and real estate are also huge industries.  With all of these industries, the most common path to purchase is research online purchase in store, or in person in the case of real estate and hospitality.  Research online, purchase in store… Research online, purchase in store.  This trend happens over and over and over again.  Yet there is almost no one (yours truly excluded) focussed on connecting these two parts to the purchase funnel.

Why is this piece missing?  Because it is really hard and a bit boring (to most people).  I think it is hugely exciting to affect the 73% of retail that is researched online and then purchased in store (

If you care to bridge the two halves of your customers’ journey, we at Purple Cloud are here to help.

6 Ways to Create a Better Customer Experience

1)  Figure out how each customer wants to be treated – Said another way, treat your customers the way they want to be treated.  This sounds obvious, but apparently it is not.  Some customers have questions, some want to be left alone.  Some want you to follow-up with them and some do not.  Some want to be emailed and some do not.  Remember the goal for your business is repeat customers, not clicks, not short-term sales, not page views.  The easiest way to know this is to ask each customer and then listen carefully.
2)  Be available to your customers – Your customers are online doing research before they enter your store (in case you weren’t aware of the internet).  Your customers are better informed than ever when they walk through that door.  Make your team available to them throughout that journey in case they want to speak with someone while they are online or in-store.  Come out from behind the cash register and interact with your customers.  Put your team in some T-shirts with a mobile payment solution so they are available and approachable.
3)  Help your customers – Your job and your employees jobs are to help your customers purchase the right product.  And not every product is for every person.  So giving your team incentives only to sell the most is not going to maximize long term revenue.  Again, giving your team incentives to sell the most is not going to maximize long term revenue.  Talk to your customer, understand their needs, answer their questions.  The highest revenue per square foot store in the world is the Apple store and I would argue is one of the few places where employees are really excited to help customers with their questions–hire people like that.
4)  Build a relationship with your customers – Your customers don’t want to be your friend, but once they find a sales person they like, they do want to maintain a consistent relationship.  Get a communication tool like Purple Cloud or a CRM tool, or anything that your employees will actually use to help them recall their customers and not simply to spam them.
5)  Be genuine – Figure out a great product to sell, hire people who love to help customers buy the types of products you sell and then repeat.  Marketing, visual merchandising, inventory management, POS systems and all the other things people worry about are so less important to the quality of the product and the quality of the people who love to help you buy that product.  The best thing about this formula is that quality people will insist on the product as well as the other aspects of the business being great.
6)  Be omni-channel – 50% of eCommerce sales is going to companies that have brick-and-mortar businesses.  Amazon, Warby Parker, Bonobos all opened brick-and-mortar stores.  The future of brick-and-mortar is omni-channel.  If you don’t know what omni-channel is, just continue to read my blogs.

Correlation Does Not Equal Causation: Follow the Customer Journey


I worked in digital marketing for 15 years: heading up data processing for both DoubleClick and Yahoo’s advertising division, and then founding one the first and largest search retargeting companies, Magnetic.  I have made a lot of friends in the industry and for this reason I feel bad about what I am going to say.  The entire digital marketing industry has forgotten the definition of marketing.

Marketing is not about being the last ad seen or the last ad clicked.  Marketing is about influencing a customer to do something they weren’t going to do.  Now perhaps it’s because digital marketing has failed to deliver on the promise of true measurement that marketers have turned to this other metric, but this is not a measure of the power of marketing.  To digital marketers’ defense, it is effectively impossible to deliver enough ads and test ads to get a statistically significant sample, and thus measure lift.  However, tricking everyone into thinking that measuring clicks and cost per acquisition is meaningful isn’t right.

In digital marketing, everyone wants to target ads based on intent.  So you are basically showing ads to people who were likely to buy your products anyway.  This is great if those people were on the fence, but this is a waste of money if they truly were going to buy anyway.  How can you tell?  Who are the right people to target with ads?

These questions are the questions that drove me to start Purple Cloud.  I don’t know the answer to those questions, but what I do know is that no one knows the answers to those questions.  The aforementioned study proves it.  The answer is to ask a different question: how do you influence a customer to do something they weren’t going to do?

That answer is far simpler.  If you want to influence a person to purchase a product, you need to focus on the customer journey and worry about measurement second.  93.6% of retail spend is made in brick-and-mortar stores.  Customers spend 5 hours and 46 minutes online each day.  The average purchase over $1000 is researched online for at least 45 days.  Are you beginning to see the customer journey?

So the customer does their research on your site, possibly visits a store, or talks to friends or loved ones about the product.  Now you can bombard that person with site retargeting ads to make sure they don’t forget about your company or product, but that has only a small influence on them.  However, current digital marketing measurement techniques will tell you that ad is the most effective ad unit regardless of its quality or influence, but rather because it was the last ad seen before purchased.  In fact, the site retargeting ad could be run on inexpensive “below the fold” digital media at the bottom of a website, where the customer doesn’t see it, but the false measurement thinks the customer saw it and would still show a strong result.

Let’s get back to the customer journey.  They visit the store and speak with a sales associate.  The customer-sales associate relationship has been shown repeatedly to be one of the greatest influencing factors, not only on the purchase, but on customer loyalty.  The customer asks their questions, looks at the product, and purchases it.

So what do you do with the $137.53 Billion spent annually on digital advertising?  Just give it to Purple Cloud?  Well, of course.  No, but you should begin to think about how you influence that customer across that journey.  How you should provide better service, stronger relationships with sales associates, build better customer loyalty, and get an improved understanding of what your customers do and do not like about your products.

In short, you should communicate with your customer throughout their journey, regardless of where it takes them (print, digital, TV, radio).  Not to repeat a line from my last blog post, but this is what we do at Purple Cloud.

Open Letter to Retailers: Stop Wasting my Time!


Dear Retailer,

I am writing because your store sells products that I both need and want to purchase.  However, it appears you are doing much to prevent me from purchasing these things.  Frankly, you are wasting my time and I am tired of it.

I don’t want to learn your inventory management system in order to see if something is in stock.  I don’t want to scroll through your stores to find my local store to determine if it is open.  I don’t want to enter all of my information into your customer relationship management system.  I don’t want to fill in your point of sale system only to wait in line at your store as you try and find my order.

In short, I don’t work for you.  You work for me.  I want a little service.  If you can provide me with a little service, I promise to buy every product from you that you sell and I need.

I want to ask a simple question like “What time are you open until?” or “Can I schedule a test drive for today at 6PM?” or “Do you have this ring on display in your store?” and I want the correct answer.  I want that answer to come from someone in the store who is accountable and can answer my future questions in person or digitally.  I want your management team to oversee the conversations I am having with your team to ensure you are hiring and training the best employees to meet my basic service needs.

With all this fancy technology, I am frustrated that I still can’t get what I want:

“I’d like a large cheese pizza”

“Okay, Josh.  It’ll be ready for pick up in 10 minutes”


“I need a black suit.  Can you put a few 40R black suits in a dressing room, I’ll be by in 1 hour”

“Your suits are waiting.  Just ask for Mike when you arrive.”

Somehow the millions of software engineers working on eCommerce and other retail technologies have still not cracked this amazingly hard (read: sarcasm) problem except one: Purple Cloud.


Josh Shatkin-Margolis

(no relation to the CEO of Purple Cloud)

Stop Marketing and Start Selling


When is the last time you purchased a car or a mattress because of a digital ad or any ad for that matter? In fact, when is the last time you walked into a jewelry store, furniture store, or auto dealership and just threw down your credit card and said, “I’ll take that one.” It doesn’t happen unless you are a celebrity showing off on one of those “I’m super rich” shows on MTV. Outside of commodities like cleaning supplies, which are often purchased online, big purchases are discussed with a salesperson and made in person. But something is amiss because retail, and specifically automotive, are the largest spenders on advertising. 

Digital advertising is the most advanced form of marketing with its ability to bid on analyzed content and to place personalized interactive creatives. The advancement of digital advertising makes sense, given the exodus of consumers from the physical store (foot traffic dropped by half or if you don’t subscribe to WSJ, click the first article here) to online (now 5 hours and 46 minutes per day). And the purchase of a commodity, like diapers, is highly influenced by advertising and often purchased online with a click to a banner ad potentially playing a crucial role in your decision-making process.

But I’m not talking about diapers. What I am talking about are the majority of dollars we spend. 93.6% of retail purchases are made in brick-and-mortar stores. I’ll say it again for people who work in digital and continue to ignore this fact: 93.6% of retail purchases are made in brick-and-mortar stores. Of the 6.4% of retail that is eCommerce, 50% are going to sites that have physical stores (i.e., Apple, Home Depot, Best Buy). So if the purchases are done in store, then the digital ads certainly cannot be direct response. Oh, they must be branding ads. Wait, then why are all of the advertisers looking at click through rates and conversions? Regardless of whether the goal is branding or direct response, it is not the best use of technology, media, or money.

The best use of money for any retailer is selling. Marketers have begun to understand this as marketing dollars have shifted toward social media in an attempt to build a relationship between the brand and the consumer. The next step is obvious and important: build a relationship between the salesperson and the customer. Use that same dynamic, targeted, and personalized technology to connect a real person looking to purchase a product with an actual salesperson who is located nearby who sells that product. I try not write about my own company Purple Cloud in my blog so I will limit it to just one sentence: this is what we do.

Humanizing eCommerce

We live in an extraordinary time.  Technology is improving faster than ever and the rate of advancement is only increasing.  The bulk of that progress is on the internet and a huge portion of the internet continues to focus on commerce and socializing.  However, something is amiss—the very technologies that are meant to improve our lives seem to be the very ones hindering them.

Now, I’m not going to try and convince the younger generations that spending 5 hours and 46 minutes a day online or texting 5 times more often than we make phone calls, does not bring you closer to your friends and loved ones.  I’ll leave that to J.K. Simmons.  I’m a somewhat introverted person, so I enjoy the peace and quiet as everyone taps away.

What I am going to talk about is money.  All businesses, even the ones run by this latest generation, want to make more money.  You may not realize, that 93.6% of all purchases are still made in brick-and-mortar stores.  Even if we look at millennials alone, they make 75% of their purchases in actual stores.  So while the latest websites offer amazingly fast shipping, easy returns, great discounts, amazing search engines, and some of the most advanced digital marketing techniques to help guide our interest, the brick-and-mortar stores are left by the wayside.

My company, Purple Cloud, is a new technology that will help brick-and-mortar stores.  I could write for hours about iBeacons, Geofencing, and in-store analytics, but with my inaugural blog post, I want to focus on the heart of the issue.  People do most of their shopping in brick-and-mortar stores, and they do so because they are social beings and they want that human touch.

Think back to the idealized memory (probably from before you were born) when folks would go to their local store, be welcomed by name and were actually provided with quality service.  Today every store wants to automate their website, their phone system, and their checkout process.  Companies are missing the point of why customers came to their store in the first place.

So, if you want to make more money, provide that human touch.  If you don’t believe me, just look at the highest revenue per square foot store in the world—their stores are filled with actual human beings, geniuses in fact, looking to engage with you.