Bring The Store To The Shopper

With the millennium approaching, online companies are all the wiser in using traditional advertising and promotions to attract customers. In July 1995, only 10 percent of the ads in BusinessWeek, FORTUNE, Newsweek and Time contained a URL. By July 1998, that number reached 91 percent (survey by Scituate, Massachusetts-based Interacumen).

CDnow.com, Cybershop and Etoys.com are all buying media and placing ads in print, radio and TV, acknowledging the world outside of cyberspace, and the fact that potential customers do not spend all their time online. Forrester Research estimated that offline advertising drove some 8.5 million US households to make a holiday gift purchase online last season. Internet companies are finding that building brand awareness offline is a very effective way to reach online buyers.

Target Where The Action Is

While print, radio and TV ads are influential, a more aggressive approach is necessary if Internet companies really want to see results. In order to reach new buyers, online companies have to target them everywhere they can complete a transaction. In airports, hotel rooms, on street corners, on the way to work, and through mobile communications devices.

If you target a potential customer en route to work or on a business flight, there is a good chance he or she will log on to their computer and use a discount flyer or coupon to buy something online.

The logic is simple: Don’t deter your target customer from his or her regular schedule. Instead, steer them towards your site with enticing promotional offers they can redeem when they reach their destination (i.e., office or home computer or laptop).

Technology Rules

Technology always opens doors of opportunity, and this issue is no exception. In advertising and promotions, technology creates a point of sale wonderland.

Not only do etailers have to go where the customers are, but they also have to understand that these places will constantly change. This means reaching people through mobile phones, information kiosks, and in-flight systems. For example, online companies can sell their products through the Intelligent Information Incorporated (III) network, a company that broadcasts messages through mobile phones to its members.

After hearing the weather or news, a mobile phone user can press a button to order something from an Internet company through a promotional interactive ad. This is an unobtrusive and convenient way to target potential customers. The opportunities for this type of customer contact will increase in the future. In fact, etailers might be able to access transactions through wristwatches, pagers or palm pilots.

Etailers may be at the forefront of revolutionizing promotions, advertising and marketing. Success depends on flexibility and the ability to stay ahead of the game. These merchants must also continue to create effective offline advertising by exploring the possibilities created by technological advances. In a world where people simultaneously watch TV and access the web, listen to the radio while surfing the Internet, and use pagers to retrieve news there are no limits.

After Marketing > Then What?

As marketing drives people to a site, the site has to be well equipped to serve customer needs and establish relationships with its consumer base. Offline, you have approximately 30 seconds to introduce your company, its product, and try to build a relationship with a customer who will never see the faces behind the company.

So, while passing out a flyer or coupon and putting up an ad may result in relatively high conversion rates, once a customer is on your web site, you must establish an efficient system of customer service.

Online companies need to create incentive and loyalty programs to give people reasons to return to the site. Email is another way to keep people coming back. The experience is still pretty superficial, so incorporating ways for visitors to interact is as close as we can get. Enticing visitors to request information or send feedback will create the compelling experience.

Below are a few examples of successes and failures.

Successes

• New York Today, a division of the New York Times, partnered with another well-known New York City brand, the Daily Soup shop. In order to drive up traffic to its site and get people to subscribe to its service, New York Today gave away promotional coupons with a specially-created URL for a Daily Soup lunch at the price of a NY subway token ($1.50). It got an 8 percent click-through rate and 45 percent conversion-to-registration rate through this promotional campaign.
• Egift.com, Cybershop’s online store, offered holiday cards to test the validity of viral marketing. Many of the recipients requested more so they could send them out as their own holiday cards. Egift.com sold Furbies directly through mobile telephones and generated a huge reduction in customer acquisition cost.
• TheStreet.com passed out gift offers to commuters during morning rush hour (as people were on their way to work and office computers) and yielded an increase in gift subscriptions.
• Outpost.com announced $1M sales in one day after running their TV spots in Q4.

Failures

• Egift.com sent out controversial postcards in newspaper polybags that depicted different comical aspects of the Clinton scandal, and some consumers reacted negatively to this campaign.
• Globe.com ran TV spots that were vague and irrelevant. The ads may have driven traffic to their site up, but they didn’t reinforce or communicate the brand very effectively.
• Sampling didn’t work for some companies like NetGrocer, who sacrificed quality for cost. The handouts did not convey the product in a compelling manner, and the people handing them out could not relate to the products. For this form of marketing to be effective, the quality of the experience needs to be relevant to that of the product or service, or people won’t take it seriously.

While etailers are testing fresh ways to reach and interact with customers, this is only the beginning. Online companies are still pioneering and reaping the rewards, but they have to continue to look for new ways to build brand and create point-of-sale in the real world.

Today it’s convergence and communications devices. Tomorrow, it could be wearable computers (a bonus for all you Get Smart fans). Whatever it is, you can bet the Internet brands will get there first.