NATIONWIDE DSNRT REPORT -- Continued growth of online sales may have been one of this past holiday season's bright spots, but subtle e-commerce developments of another sort were actually more significant.
During November and December, it became apparent efforts by bricks-and-mortar retailers to more tightly integrate their online efforts with conventional store operations were being effective. In doing so, they have moved closer to fulfilling the potential of the highly touted bricks-and-clicks business model.
"It is clear that bricks-and-mortar retailers are committed to having an online presence that is integrated with their physical presence in a meaningful way," said Russell Jones, a vp in the retail practice of Cap Gemini Ernst & Young.
Several striking examples from the past holiday season involved Target, Wal-Mart, Sears and Circult City. In the category of most extensive use of a conventional advertising medium to promote a creative e-commerce initiative, the award would have to go to Target. The company devoted four pages of a 32-page circular that ran in Thanks-giving Day newspapers. The insert extended from the circular and across the top Target in-quired "Can't wait to save? Go to target.com."
Twenty-one items were featured, and to create a sense of urgency, the prices were good only on Thanksgiving. As an added bonus, if the order was for more than $50 and paid for with a Target Visa shipping was free.
Wal-Mart devoted less real estate in its Thanks-giving weekend circular to online retailing, but the featured promotion illustrates the integration point just as effectively Wal-Mart appealed to the insecurity 01 potential jewelry buyers with this headline across the bottom third of a page: "Learn how to buy a diamond at Walmart.com" that encouraged them to visit the site's jewelry learning center.
Sears and Circuit City took a different approach. Both offered online customers the option of picking up merchandise at stores. On Nov. 28, Sears announced a service that allowed customers to see whether items purchased online were in stock at a local store. They could pick up the merchandise at the store. According to Sears, "In many cases, the product may be picked up the same day as ordered."
The benefits of tighter integration are becoming apparent in the volume of people visiting the Web sites of conventional retailers. During November, seven of the top 15 e-commerce sites identified by Nielsen/NetRatings were operated by conventional retailers, including Toys "R" Us, Barnes and Noble, Best Buy, Wal-Mart, Sears, Target and JCPenney.
On Dec. 11, Circuit City, announced an arrangement with Amazon.com, allowing consumer electronics items offered on Amazon to be picked up and returned to its stores.
"Steady traffic to many bricks-and-mortar sites indicates consumers are researching online with the intent of buying in the actual stores, highlighting the need for retailers to integrate their online and offline operations," said Jupiter Media Metrix research analyst Jared Blank.
Integration is only part of the story, though. The online efforts of bricks-and-mortar retailers have also improved considerably. "We've seen huge improvements in the way Web sites work, and these improvements have made it much faster, easier and more fun to shop online," said Mary Humphrey, director of e-commerce at AOL. "Online shopping is becoming more mainstream, and one of the key reasons is the timesaving convenience. You have the ability to find anything you want without the hassle of parking lots and lines."
The mainstream nature of online retailing was illustrated by a survey commissioned by the International Mass Retail Association in early December. The survey of 1,000 people found 627 people had Internet access, and 54% of them used it as a tool to find product information. Their second most prevalent use, mentioned by 39% of respondents, was to see if a store carried a specific item. Buying products was mentioned by 38% of those surveyed.
Despite the improved Web sites, tighter integration and consumers overall happiness with purchasing online, online sales growth has begun to slow from prior-year levels. Goldman Sachs analyst Anthony Noto's estimate for full-year 2001 online sales of $32.2 billion represents a 20% to 25% increase from 2000, when sales increased 68% from 1999.
"Our survey indicates consumers are only marginally shifting spending online," Noto said. "Respondents indicate their planned holiday budget allocation of online spending for 2001 would only be modestly changed in favor of shopping online, compared to 2000."
Those surveyed by Goldman Sachs indicated 14.8% of their holiday budget would be spent online, as compared with 12.4% last year. An even larger percentage of next year's holiday budgets likely will be spent online, especially if bricks-and-mortar retailers continue to improve online offerings and make them an integral part of their overall merchandising, marketing and operations strategies.
Saturday, October 6, 2007
Don't sell Print against the WEB: It's imperative that ad sales reps talk about the total customer experience, not the strengths of print versus onlin
I'm sorry Josh, we're cutting our print ad budget in half and putting our money into our Web site." I only had to hear that a few times before my "Web phobia" hit an all-time high. The challenge was how to respond when clients told me that their Web expenses were coming out of the same marketing communications budget as their ads. The knee-jerk overreaction was to start selling against the Web--but this is a huge mistake. The Web is far more than banner ads. And if your Web discussions with clients focus on contrasting the merits of banner versus print ads, you will miss a huge opportunity to sell more space. There are ways to approach this challenge that prove that print advertising is more valuable in today's economy, not less. When I stated using this new approach, I had to adjust my thinking and behavior in four ways:
1 Bring up the Web on Every Call You Make
I know many space reps who take an "Ignore it and it will go away" attitude. They ask, "Why bring up a potential competitor?" The answer is that your customers are dying to talk about the Web. It's new, interesting and confusing--and there are no definitive answers to anything. If you can talk intelligently about the Web, you will have your customers' undivided attention. Most clients would rather talk about how the Web is transforming, or not affecting, their business, than talk about print advertising. Gain access to this level of discussion, and you will be far more persuasive when the topic shifts to print advertising.
2 Start Talking About the Total customer Interface
Ten years ago, I described print advertising as a slice of the overall marketing communications pie. Other slices included direct mail, trade shows, TV and radio advertising, and so on. My job was to lay out the communication options and advocate the importance of print ads over the others. Today, viewing the Web as just another slice of the pie competing for your ad dollars is a mistake, because the Web's impact on a client's business typically goes far beyond marketing communications. While the Web may be a vehicle for exposure, it can also function as its own sales channel (e-commerce), a way to distribute collateral material, a customer service vehicle, a way to offer technical help, a dealer/distributor replacement, a way to offer contests and warranties to customers, a research tool, a way to offer product customization, a tool for customer relationship management, and a tool in building customer loyalty.
Consequently, while today's marketing discussions go beyond marketing communications, they are still all about the total customer interface. Become part of these discussions, and you will be in a position to recommend print advertising as a way to help augment these other programs. Today I never talk about how print advertising fits into the "marketing mix." I talk about how it fits into the "total customer interface."
3 Explain the new uses of print advertising
The top uses of print advertising just 10 years ago were to generate sales leads, introduce new products, create exposure and build a brand. These four topics were the main areas of discussions with clients. Today, the Web has replaced magazines as a lead-generation tool. So-called bingo card responses are plummeting as readers realize that a quick hop onto the Web can give them instant access to information that would have taken weeks to acquire via bingo cards.
In addition, the whole concept of what a new product is and how it affects company's sales is being revisited by most marketing directors. The new thinking is that new products and new product features are not the magnet they once were. New technology and advanced manufacturing techniques have empowered manufacturers to bring products to market much more quickly and duplicate any advantageous feature a competitor may offer.
For example, one professional lens manufacturer told me that he was once able to achieve four to six years of competitive advantage any time his company added a new feature. Now he sadly reports that that advantage is down to six months. In a world where unique product features don't stay unique for long, selling the overall promise of the company, the brand, has become the new mantra of marketers.
The Web has accelerated this. If you've tried to buy anything on the Web, the good news is that you have tremendous options. For marketers, that's also bad news because suddenly, if your brand or company name is not in the minds of your prospects, it's likely that they will do their buying on someone else's Web site.
What this means for you is what you already know: Print advertising, unlike electronic media, is a brand builder's dream. It has a physical presence that makes the message more tangible. In addition, since your message is physically bonded to the exposure vehicle, it creates an affiliation of quality that helps the branding process.
4 Help Them Find The Money
While using the Web creates expense, it is also a big money saver. Your job is to help your clients realize the savings and help them budget those savings into growing print advertising.
1 Bring up the Web on Every Call You Make
I know many space reps who take an "Ignore it and it will go away" attitude. They ask, "Why bring up a potential competitor?" The answer is that your customers are dying to talk about the Web. It's new, interesting and confusing--and there are no definitive answers to anything. If you can talk intelligently about the Web, you will have your customers' undivided attention. Most clients would rather talk about how the Web is transforming, or not affecting, their business, than talk about print advertising. Gain access to this level of discussion, and you will be far more persuasive when the topic shifts to print advertising.
2 Start Talking About the Total customer Interface
Ten years ago, I described print advertising as a slice of the overall marketing communications pie. Other slices included direct mail, trade shows, TV and radio advertising, and so on. My job was to lay out the communication options and advocate the importance of print ads over the others. Today, viewing the Web as just another slice of the pie competing for your ad dollars is a mistake, because the Web's impact on a client's business typically goes far beyond marketing communications. While the Web may be a vehicle for exposure, it can also function as its own sales channel (e-commerce), a way to distribute collateral material, a customer service vehicle, a way to offer technical help, a dealer/distributor replacement, a way to offer contests and warranties to customers, a research tool, a way to offer product customization, a tool for customer relationship management, and a tool in building customer loyalty.
Consequently, while today's marketing discussions go beyond marketing communications, they are still all about the total customer interface. Become part of these discussions, and you will be in a position to recommend print advertising as a way to help augment these other programs. Today I never talk about how print advertising fits into the "marketing mix." I talk about how it fits into the "total customer interface."
3 Explain the new uses of print advertising
The top uses of print advertising just 10 years ago were to generate sales leads, introduce new products, create exposure and build a brand. These four topics were the main areas of discussions with clients. Today, the Web has replaced magazines as a lead-generation tool. So-called bingo card responses are plummeting as readers realize that a quick hop onto the Web can give them instant access to information that would have taken weeks to acquire via bingo cards.
In addition, the whole concept of what a new product is and how it affects company's sales is being revisited by most marketing directors. The new thinking is that new products and new product features are not the magnet they once were. New technology and advanced manufacturing techniques have empowered manufacturers to bring products to market much more quickly and duplicate any advantageous feature a competitor may offer.
For example, one professional lens manufacturer told me that he was once able to achieve four to six years of competitive advantage any time his company added a new feature. Now he sadly reports that that advantage is down to six months. In a world where unique product features don't stay unique for long, selling the overall promise of the company, the brand, has become the new mantra of marketers.
The Web has accelerated this. If you've tried to buy anything on the Web, the good news is that you have tremendous options. For marketers, that's also bad news because suddenly, if your brand or company name is not in the minds of your prospects, it's likely that they will do their buying on someone else's Web site.
What this means for you is what you already know: Print advertising, unlike electronic media, is a brand builder's dream. It has a physical presence that makes the message more tangible. In addition, since your message is physically bonded to the exposure vehicle, it creates an affiliation of quality that helps the branding process.
4 Help Them Find The Money
While using the Web creates expense, it is also a big money saver. Your job is to help your clients realize the savings and help them budget those savings into growing print advertising.
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