Milo gives local retailers sales

Leading up to the Christmas period with all this discussion around crazy discounts offer on Black Friday, I felt it would be suitable to look at new technology solutions for growing the value of the online retail market.

One of the most interesting examples which seems to combine both offline/online models into a simple platform is Milo.  It is also interesting as Milo is one of the fastest growing online retail websites in the US with continuous 70% growth each month since it was launched in December 2008 and is on track to reach 1 million users this month with around a real-time inventory of 1.5 million items.  While this is still a tiny fragment of the online retail market Milo CEO Jack Abraham advises that around 5% of US retail sales are done online but a significant portion of in-store purchases is researched first on the internet which will benefit from platforms that can deliver both online & offline information.

“Research online, buy offline is projected to represent 40 percent of total retail sales by 2011 – forecasted at $1 trillion – versus e-commerce, which is online 5 percent,” said Jon Callaghan of True Ventures.

While the concept of aggregator websites is not new the Milo concept takes the best of online affiliate/price comparison websites and combines this with offline store inventory availability which is available in-store now.  The secondary benefit is that Milo solves many of the problems on how to drive online sales back to offline stores but these offline sales still require a more effective revenue tracking process to make it the perfect solution.

Many existing comparison websites don’t deliver a perfect solution for retailers because they make it impossible to find store details because this offline cross-promotion breaks their business model.  Milo risks reduced revenue by promoting the pickup instore feature along side the listing of store locations that have the item in stock. This cross-promotion does make a solution like Milo a suitable promotional tool for traditional Brick’n’Mortar retailers who are fighting the move online such as Harvey Norman.  Many large retailers who run franchise operations don’t want to compete with their franchisees so avoid the online model.  Retailers need to understand the real benefits of a dual platform that can associate offline revenue back to their websites.

Even the approach to building the platform has been smart with a focus on building partnerships with around 42,000 stores in 30,000 communities across the US. The size of the US market means they are yet to reach the smaller independent operators but Milo continue to add new retail partners each month.  It is hoped that they can expand their product to other countries but this is dependant on partnerships with local retail partners.  Milo seeks to solve the common issue of when looking locally having to phone or drive around to find what’s available.  This issue is often compounded at Christmas with popular items quickly selling out requiring missions across town to get the last available item.

It seems that Milo is a great potential solution but how well does it function compared to individual online retailer such as Dick Smith who offer brick & mortar stores, an extensive online store but also have a similar “check store stock” feature.

While the Milo concept may change retail habits, their onsite search functionality is nothing flash and it is missing some of the intelligent search as you type features offered by SLI Systems available on that visitors expect.

Their search feature doesn’t appear to be using cookies or tires to estimate your location by IP address so it can become annoying as you have to re-enter your location each time you visit.  These simple aspects are very easy to implement online and as repetitive requests can aggravate visitors.

The smart thing about Milo is that even when misspelling your current location as “sanfransico” or “new yokrr” it usually provides the correct location. The only issue seemed to be when using common US towns/cities without state location where it did not offer suggestions “Did you mean?” which would have been helpful.

Another interesting idea which could benefit from local and offline marketing promotions but doesn’t seem to be yet functioning is “Hot Products at Local Stores”. I assume the idea is to start to provide related products based on what other people are buying in your geographic area. A local event such as the Melbourne Cup may highlight binoculars, champagne or panadol.  Other localised events such as sudden cold snap could mean it highlights Snuggies, Cashmere Jumpers or Ski clothes.  The benefit of online retail is that these changes can also be tested in real-time to see how these suggestions affect your conversion rates or improve your ecommerce transactions.

While Milo’s out of stock suggested alternatives feature is unique and not currently offered on DickSmith, it is let down by not being linked to your local availability levels.  You may find that some of the suggested products while still available online are actually out of stock locally.  While checking stock levels for out of stock suggestions is more technically difficult due to the requirements of constant updates to stock levels, it would make it a perfect solution for finding close enough products instantly.

Like most new retail websites Milo’s suggested products algorithm also shows a more work is required to iron out the bugs as I fail to see the match between Lancome Perfume and Jaws DVD or Lancing Devices. The feature is not broken it just seems to have trouble with certain products which is usually related to incorrect or missing product data.  Often the weak point of any online store depends on staff adding the correct and complete set of product data.

The final point about the success of any platform including Milo is its strategy of trying to build a search engine friendly website structure from the start.  Since any new retail website is fighting against established affiliate/aggregators good search optimisation is essential for success.

Milo is a wonderful product to find your perfect Christmas gift across multiple US retailers and I hope that a similar local product is launched within Australia soon.  If Brick’n’Mortar retailers are to make as much money as possible from online traffic they need to consider unique solutions.