Home  › Marketing › Strategies

Online Retail: Multichannel Consumers Equal Multichannel Marketing

  |  January 19, 2005   |  Comments

Retailer in all categories wisely acknowledge the Web's influence on on- and offline spending.

Admittedly, I have retail on my mind. Becoming best friends with our local UPS and FedEx drivers this holiday season (nearly all of my purchases were online) certainly didn't hurt. Yet the real impetus behind my retail sector interest is twofold: increased desire by several retail clients to use digital media as a primary media vehicle and my upcoming speaking engagement at the 53rd Annual Retail Advertising Conference.

General Market Characteristics

According to Jupiter Research (a Jupitermedia Corp. division), total U.S. 2004 online retail sales (excluding auto, travel, and prescription drugs) totaled $66 billion, approximately 4 percent of overall retail sales. Sales are expected to grow to $130 billion, or 6 percent, by 2009. Growth will come from more people buying online and more money spent per sale.

Online buyers are slightly more affluent than overall Web users. Jupiter Research currently estimates 72 percent of Web users with household incomes $75,000 or above shop online. Though all demographic and economic segments are represented, online retail's fastest growing segments are expected to be adults aged 50-plus and lower-income consumers (those with household incomes of $15,000 or less). The same report says these segments will grow 147 percent and 44 percent, respectively, by 2009.

The Online Influence

Retailers across all categories wisely acknowledge the Internet's influence on both on- and offline spending. In some categories, this influence is obvious. When was the last time you bought a "white good" item (washer, dryer, refrigerator, dishwasher, etc.) without first conducting extensive online research? The same could be said for electronics, both hard- and software. This influence gives rise to a whole new area of focus: the multichannel consumer, of whom much has recently been written.

Even retailers that wouldn't seem significantly affected by multichannel consumers acknowledge the Internet's significance. Senior-level managers at both Target and Sears are on record as saying though online commerce represents under 5 percent of their overall sales, they're convinced 40 to 50 percent of in-store sales are influenced by the online channel. These are significant numbers; they help explain the recent resurgence in the retail sector's online advertising spending.

Multichannel Consumer Equals Multichannel Marketing

Large retailers have traditionally used a variety of elements in the marketing mix. There's certainly always been a mix of national and local media, including broadcast TV and print and a healthy dose of Sunday circulars. Online, the majority of outbound activities have focused on driving site traffic, commerce, or both. Tactics primarily revolve around affiliate and search marketing, focused CPC (define), and cost-per-sale display advertising.

From a site perspective, advertisers have worked to put Sunday circulars online, as well as improve usability and design. Many online retailers that have operated for several years used 2004 as the year to make wholesale site improvements. We saw significant relaunches of Home Depot, CircuitCity.com, and Best Buy, to name but a few.

These site improvements are beginning to pay off. According to comScore Media Metrix, the pace of unique visitor consumer traffic to retail sites is increasing at a faster rate than that of traffic to total Internet sites. In addition, the raw number of retail sites with measurable traffic (to the comScore panel) increased significantly more than the number of overall Internet sites with measurable traffic. I believe this trend will continue at least for the next year or two.

Enter Online Brand Advertising

Direct response and brand advertising aren't mutually exclusive. In the online space, all communications afford an opportunity for action. The most exciting change in the retail space is the clients' realization they need to do more traditional online advertising to drive brand preference and favorability. As we look at competitive retail spending, we see more clients across the industry take a holistic view of the Internet and devote significant resources to activities that may not be linked to an immediate sale. The challenge is to create a metrics system to accurately measure all digital marketing elements' contributions to increasing sales.

Are you up to the challenge? Have you had recent retail successes or failures and would like to share them? If so, please drop me a line.

ClickZ Live New York What's New for 2015?
You spoke, we listened! ClickZ Live New York (Mar 30-Apr 1) is back with a brand new streamlined agenda. Don't miss the latest digital marketing tips, tricks and tools that will make you re-think your strategy and revolutionize your marketing campaigns. Super Saver Rates are available now. Register today!

ABOUT THE AUTHOR

David Cohen Before joining Universal McCann Interactive, David Cohen was North America media director at Zentropy Partners. At UM Interactive, he plays a pivotal role in integrating interactive media into clients' overall marketing and media plans. David oversees all interactive media strategy, including planning, buying and analysis operations in the New York office. Current client responsibilities include: Wendy's International, Johnson & Johnson, Sony Electronics, Marriott International and Bacardi. David is active in many industry organizations and speaks frequently at seminars and lectures for the Advertising Club of New York and the American Association of Advertising Agencies (4A's).

COMMENTSCommenting policy

comments powered by Disqus

Get the ClickZ Marketing newsletter delivered to you. Subscribe today!

COMMENTS

UPCOMING EVENTS

UPCOMING TRAINING

Featured White Papers

Google My Business Listings Demystified

Google My Business Listings Demystified
To help brands control how they appear online, Google has developed a new offering: Google My Business Locations. This whitepaper helps marketers understand how to use this powerful new tool.

5 Ways to Personalize Beyond the Subject Line

5 Ways to Personalize Beyond the Subject Line
82 percent of shoppers say they would buy more items from a brand if the emails they sent were more personalized. This white paper offer five tactics that will personalize your email beyond the subject line and drive real business growth.

WEBINARS

    Information currently unavailable

Jobs

    • Lead Generation Specialist
      Lead Generation Specialist (The Oxford Club) - BaltimoreThe Oxford Club is seeking a talented writer/marketer to join our growing email lead-generation...
    • Health Marketing Editor
      Health Marketing Editor (Agora Inc.) - BaltimoreCome flex your intellectual muscle as part of Agora, Inc’s (http://agora-inc.com/) legal team...
    • Marketing Systems Analyst
      Marketing Systems Analyst (OmniVista Health) - BaltimoreOmniVista Health is looking to add a Marketing Systems Analyst to our expanding team. We...