Innovative retailers are challenging 4 key retailing rules of thumb to outperform rivals stuck in the old ways. A recent Harvard Business Review study provided rigourous qunatitative evidence of this fact and Business Week has written about the explosive growth of retailers taking new approaches.

So what are these 4 retailing rules of thumb that may now becoming myths and how can I learn more about an online community approach to retail.

Table A: Myths

Myth #1: Your best customers are always the ones that spend the most money with you. This rule of thumb assumes customers have no influence on other customers’ purchases and only considers what each customer purchases in isolation. From a community perspective it’s more important to consider the total spend of an individual customer plus the amount that customer influences others to spend with you. Everyone knows friends that are experts in a category and are usually the first to buy the latest product. We turn to them for advice, and they have significant influence over our purchases. They’re the mavens in our life. Many people belong to informal groups (such as book clubs)or more formal organizations (e.g., associations, teams, etc.) that provide advice and guidance when making purchases. Other industries are much more advanced in understanding adoption curves and the roles of early adopters, but retailers are lagging. To get started, identify those customers that are often the earliest to buy new products-your early adopters. Enable them to invite their friends and the members of the groups they belong to, and provide them with tools to easily share information with one another and identify others with similar interests. By focusing on them, you can leverage their natural influential behavior to virally grow the community, increase loyalty, and drive demand to your store.

Myth #2: Wait until you have the product in inventory before you try and sell it. The rationale for this rule is obvious. Trying to sell something you don’t have in stock will only frustrate your customers and cause them to either postpone a purchase or potentially go to a competitor. How can this rule be wrong?

This rule assumes that a single behavioral characteristic applies equally across your entire customer base. Your early adopters pride themselves in being the first among their friends to know about the latest products, and they highly influence the purchases within their personal network. These early adopters are always looking for new products and yet nearly all retailers ignore this most influential segment and their particular needs. By reaching out to this group online and sharing information about products that are coming, retailers can accomplish the following:

• Capture pre-buy commitments from this group before the product hits inventory
• Tune forecasts based on feedback and dialog
• Enable them to share the information with their friends for highly credible viral marketing that can increase the pre-buy demand and commitments
• Increase loyalty to your brand as the place they most often learn about and buy the latest products

Myth #3: It’s not the buyer’s job to interact with customers. Though retail buyers make the critical decisions about what they think their customers want, few retailers have a process to enable interaction between buyers and customers. Most retailers are faceless organizations to their customers and don’t seek to make their category experts available to them. The explanation for this is partly technical and partly cultural. Until recently, it was time-consuming and cumbersome to gather meaningful input from customers in a manageable and timely fashion. Fan Networks offer built-in tools to support and encourage dialog: merchant blogs, ratings/comments, and polls make it easy to learn about opportunities and problems, and get feedback to improve product selection and demand forecasting.

Myth #4: Sell through a single website storefront. Most retailers still view their single website storefront as their largest store, and tremendous energy and resources are spent trying to entice customers to come to the site to buy. Many retailers leverage affiliates, but each affiliate has the identical problem of drawing traffic. Instead, what if a store can be placed where the customers are spending their time, rather than trying to get the customers to come to the store? Ecommerce widgets allow retailers to enable customers to “take the store with them” and place “the store” on their Facebook page, community site, etc. And since retailers can place ecommerce widgets anywhere they currently place banner ads, it’s now possible to enable shoppers to securely transact directly within the widget, rather than driving them back to the merchant’s ecommerce site to transact.