Online Brands Move Offline

Two years ago, most companies began to realize the importance of having an online strategy. Disney’s Donald Duck became interactive, Mattel’s Barbie can be designed on-screen, Levi’s can customize your perfect pants, and Swatch offers a worldwide Internet watch.

But just as many companies were beginning to master online branding, those at the head of the pack were already moving their online brands offline.

Back in 1997, Internet portal Yahoo! launched Yahoo Magazine to capture an audience that was not living and breathing the Internet. Even though the magazine hasn’t hit the US Top 10, it is fairly popular, while also positioning its online service.

In 1998, Amazon moved from basic book selling to a range of products like music, videos and postcards. Two months ago, the company announced the acquisition of an online grocer. Amazon was no longer books but online trading. Now unconfirmed rumors claim that Amazon will soon launch Amazon Cola.

As an online grocer, Amazon will quickly learn about the consumer’s spending habits, using the Telstra Internet Fridge or Philips Internet Microwave, perhaps, and have the ability to cross or up sell new services.

The more companies can track online behavior, the more they can establish products that reflect an innovative spirit and target a growing group of people who seek convenience.

Drugstore.com is also taking the offline world very seriously. Peter Neupert, founder and CEO of Drugstore.com, four months ago announced that concepts based on bricks and mortar belonged to the past. Now the online store has taken everyone by surprise by announcing a partnership with pharmacy chain Rite Aid.

You can order refills for your Rite Aid prescriptions at Drugstore.com, and arrange to pick up your prescriptions on the same day at the store location of your choice. Home delivery from Drugstore.com is available to the tens of millions of people with prescription insurance coverage through PCS, a Rite Aid subsidiary.

But why this dramatic change in strategy? Because Drugstore.com quickly realized that the only way to survive is via the establishment of an offline distribution channel. When Ms. Smith needs drugs delivered as soon as possible, a 48-hour service isn’t good enough.

Only the local drugstore can fulfil this need. Shortly after announcing the partnership, Neupert said: “We needed an offline brand to help us build our online concept.”

Selling drugs is a serious business. It’s all about trust. Trust that the right product will be delivered in time. Trust that very personal information isn’t distributed to the rest of the world.

Drugstore.com is one of the largest online drug stores, but has existed only two years. What would you trust most? A brand with a two-year history – or one that’s been around for 75 years? Drugstore.com needed to buy credibility and visibility. Internet penetration has finally become strong enough to be taken seriously, but Rite Aid’s brand image in the USA is still more powerful than online banner ads.

To build success, businesses are combining the best of these two different worlds. The companies spending the most marketing dollars in the online world are also the biggest spenders in the offline world. AOL, Yahoo and Amazon are investing huge sums to promote their online brands offline these days.

The trend is obvious — a successful online strategy, in most cases, survives only with the help of an offline strategy.

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