The siren song of demand: Oculus Rift's run to market
Tread carefully into stores, Oculus Rift. Your strategy may turn into an actual rift among your most loyal customers.
The creator of virtual reality headsets, long anticipated by many, is rolling its product into Best Buy before preorders have been filled. This has some shoppers delighted and others irked. For me, it is a reminder of a bad experience I had with Fitbit, which still stings.
The event took place a year ago when the folks at Fitbit invited me, via email, to preorder a Fitbit Charge HR, its latest model. So I did, but the order never arrived. It took a call to Fitbit to learn that the product was no longer available to me because Fitbit chose to make it available to its retail partners first.
What began as a positive brand experience dissolved into a troubling question: When it comes to choosing the best customer to serve, who is king — the end user or the retail vendor? It's a question many wannabe Rift owners are asking today.
Oculus, apparently, is trying to make both king, and that's a heady promise. Oculus is not the first manufacturer to try to serve both consumer and retailer, and history has shown doing so presents recurring challenges. These challenges, however, can be diminished.
Delayed from April to June
Oculus Rift is moving ahead with its retail plans to distribute its virtual reality goggles through Best Buy. This is despite the fact that it is behind on shipping preorders to its first, and therefore potentially most loyal, customers.
"The problem for Oculus is that shipping hasn't gone smoothly, with the company having to push preorders back substantially for a number of customers," Patrick Klepek wrote in Kotaku.com. "My own preorder was moved from April to June — a big delay!"
Oculus has said it would make just a small number of its product available to a limited number of Best Buy stores on May 7, and the retail agreements apparently were made in advance. Still, the sudden availability has got to frost those who slapped down their $599 first.
FitBit gives fits
My experience with FitBit was similar. Now that I am somewhat inured to the possibility of disappointment, I make my choices more carefully.
Truth is, manufacturers that offer direct-to-consumer options can put themselves at a disadvantage if they choose to go both digital and traditional retail routes. They want to meet various consumer needs in order to build loyalty, but in doing so are vulnerable to the demands of their retail vendors. And since retail vendors buy in volume and require costly contracts, they can have greater kingly power.
Like Fitbit, Oculus should have a database of customers who have purchased its other games, gear and apps. It can use that information to offset disappointments over delays through well-timed communications, and apparently has tried.
An online message to those who preordered Rift offered them a chance to purchase it from retail while maintaining preorder benefits they were promised. These include an EVE: Valkyrie virtual reality game and priority status for preorders of its Touch virtual hand controllers.
"Starting May 6, if you're interested, simply go to your order status and let us know you've purchased a Rift at retail, and we'll cancel your preorder," the message states.
It’s a solid gesture, though it may ring hollow as many customers may wonder exactly what their priority status on preorders stands for now.
However, Oculus can use its data in other ways, as well. An analysis of past customer interactions online could avail Oculus to the experiences its customers most expect and find most relevant. Insights into how quickly certain customers purchased previous Oculus products could distinguish those who are more likely to be early adopters from those who will wait for retail. It can tailor offers for each.
Let's consider Oculus' attempts to resolve frustrations among customers who preordered by inviting them to purchase in-store. It also can provide variations of that offer — give those early adopters 20 percent off if they maintain their preorders. Or, if it wants to make both shopper and Best Buy happy, coordinate preorder-only parties at Best Buy, where customers can try out their new games.
And it never hurts to be humble. Customers understand the challenges of supply and demand. A little humility and honesty can go a long way. It helps to demonstrate that events like this are learning experiences. Perhaps next time Oculus releases a new product it should specify that there is only a limited number available for preorder. That would at least manage expectations.
Many manufacturers are vying to straddle both direct-to-consumer and bricks-and-mortar, but they first should establish the end goal in doing so, because the laws of the retail land are fairly rigid: If you want to rule both online and in-store, then deliver on what you promise. Be in stock, be on time and ensure the product's arrival is memorable for the right reasons.
Bryan Pearson Bryan Pearson is President and CEO of LoyaltyOne Inc. and the author of the best-selling book The Loyalty Leap: Turning Customer Information into Customer Intimacy. www