Pixels And Brick

What’s the next frontier for online marketing? Immersive VRML ads? Tastefully personalized Spam? How about something really daring –like moving the entire marketing and sales effort offline?

Going offline with advertising alone is nothing new. Last year, Amazon.com, CDnow, and Monster.com were among many online companies that took to the radio with in-your-face spots. Excite, Snap!, and Cyberian Outpost graced TV with equally aggressive commercials (especially so in the last case if you happened to be a gerbil or high-school marching band). But now it would appear that a slowly growing number of online-first companies are building their marketing strategy with varying combinations of pixels and mortar.

Some are simply adding paper. The gourmet pasta web site the Flying Noodle found in 1995 that a number of people receiving its products were being given them as gifts, and were not themselves regularly online. Rather than give up potential repeat or referral business, Flying Noodle began sending out a small mail-order catalog. Now, the company’s Raymond Lemire says that catalog and corporate sales account for 50 percent of Noodle’s total business.

Similarly, gardening site Garden.com launched Garden Escape magazine in March. Published by magazine veteran Primedia, Garden Escape has articles annotated with detailed information on how to purchase featured products through the Garden.com site and its 800 number. Garden.com claims that Garden Escape grew out of the frustration of gardeners who saw cool products in other publications but didn’t know where or how to buy them.

Merging editorial and advertising is hardly unusual: Many e-commerce web sites and “house organs” of airlines and other businesses routinely orient their content to services they provide or promote. But merging the online with the offline is. “Garden.com thinks of itself as a gardening company before it thinks of itself as an Internet company,” explains CEO and President Cliff Sharples. “It’s a very interesting brand-building exercise.”

Other web-first businesses are moving into storefronts. iPrint.com, a custom printing site, recently launched tests of self-service kiosks for custom printing services inside two major quick-print chains. iPrint.com CEO and Chairman Royal Farros thinks “it’s a dream for the printing world. It frees them up to concentrate on higher-margin items and expands (our) installed base of customers at a reasonable cost.”

Video e-tailer Reel.com opened a brick-and-mortar store — intended to be the first in a national chain — in Berkeley, California, in 1997. The company’s subsequent acquisition by Hollywood Video put an end to the physical expansion, but the relationship with Hollywood Video itself shows how much Reel.com still believes in the cross-promotional power of brick-and-mortar. In Hollywood Video stores, where the focus is on rentals, in-store promos push Reel.com for video sales.

Admittedly, sometimes a physical presence doesn’t work. Pioneering computer products site Cyberian Outpost opened a store in existing retail space at its Kent, Connecticut headquarters in late 1995, but closed it within six months. Not only was doing inventory a hassle, but rapid expansion of the online business meant it needed the room for more offices. Besides, notes founder Darryl Peck, “We were doing more business on the web in ten minutes than we did in the store in a week.”

Yet even businesses that started in the physical world might benefit from not entirely abandoning their material roots. Consider the dramatic move by foundering Egghead Computer to shutter all of its retail stores in favor of a nascent web site. Speaking as a one-time Egghead marketing manager, Egghead could have greatly enhanced its transition to the web by leaving a single physical store open in each of the markets in which it had a presence. That would have given Egghead.com the equivalent of virtual showrooms, and constantly reminded real-world customers that Egghead was still in business online. Instead, the day after the transition, loyal customers were greeted by vacant stores that might have just as well had signs proclaiming “Eggdead.”

There is subtle but growing evidence that for branding and selling, having a physical presence is a plus for online enterprises, just as going online can increase the cachet of a material store. For online retailers, physical outlets can enhance consumer trust, allow for unique cross-promotion, and alert occasional online shoppers to a business’ existence.

This emerging trend toward establishing an offline presence is most likely a classic pendulum swing. Hype had it at first that “virtual” storefronts were the wave of the future, and that physical stores, being at a disadvantage, were on the verge of extinction.

But if it were true that a more convenient means of shopping automatically renders its predecessor obsolete, the Sears catalog would have meant the end of all Sears retail stores (instead, the catalog itself disappeared). Similarly, the assumption that e-shopping will completely wipe out brick-and-mortar belies precedent and reality. After all, as iPrint.com’s Farros says, reality is “where the customers are.”

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