By drawing on the experience of traditional retail, and taking advantage of the unique opportunities presented by the Internet, e-retailers can look brightly at the future in spite of a gloomy economy.
Although Internet sales is one of the few retail channels that is actually growing, plenty of e-retailers are preparing to launch major Christmas sales despite the traditionally generous spirit of the season. The urge for posting flashing sales banners both here and there, of course, stems from the gloomy economic climate and grim prognosis for the future.
But in the face of an economic recession, it takes more than a traditional sale to continue to drive profits while still retaining current customers, as well as recruiting new ones. E-retailers have a unique advantage in the undertaking of this task, but to be successful they must learn from traditional strategies often applied by the brick-and-mortar grocery stores around the world. A typical example is when these stores divide their product ranges into the following categories: traffic drivers, profit drivers and loyalty builders. A traffic driver is a product that the store’s target audience needs to purchase often, and that it perceives as being expensive. Profit drivers are other products that are important to the target audience, but which they do not purchase as often and thus, are not as price sensitive towards. And finally, loyalty builders are the more luxury oriented consumption products.
The logic is simple. By offering a reduced price on the so-called traffic drivers, you can attract more customers to the store, and once they are there, they may as well pick up the profit drivers. During their visit, they will be exposed to the luxury goods—creating a positive experience and thus, urging the customer to revisit that particular store again in the future. This strategy allows the retailer to maximize customer acquisition, whilst only reducing the price of the traffic driving products.
E-retailers can also apply a more sophisticated version of this strategy. By allowing their most popular, top-selling products to act as traffic drivers by exposing them in sales campaigns, they can drive a maximum number of visitors to the site. This is where their advantage over the brick-and-mortar stores comes in. By using behavioral-based marketing, the e-retailer can control the extent to which the customer also picks up those important profit-driving products during his or her visit. By exposing the customer to products that one knows other visitors with similar behavior are interested in, and all the while applying business rules to regulate which products should be presented depending on profit margins, etc., the e-retailer can control exactly which products are exposed to each individual visitor—in real time.
Through the application of old and tested strategies combined with the latest technology, e-retailers can increase turnover and market share while not sacrificing any profit margins. And this during times when most physical stores are struggling with sales banners and red price tags.
It often seems the crazies come out in greater numbers at Christmas time than Halloween. According to a recent article in Online Media Daily:
Watchdog organization Center for Science in the Public Interest has filed a complaint with the Beer Institute–a trade association and lobbying group that publishes self-regulatory guidelines for beer marketers–about the “Running of the Santas” pub crawl. The complaint, which was forwarded to the Federal Trade Commission, alleges that beer companies’ sponsorship of the event, as well as web ads touting Santa-themed pub crawls in 25 cities, run afoul of Beer Institute rules prohibiting depictions of Santa Claus in marketing material. The watchdog’s complaint mentions beer brands owned by Anheuser-Busch and MillerCoors and argues that sponsorship of the holiday-themed pub crawl is problematic, as is the use of beer brand logos in ads.
What’s next, a demand to end all Toga-themed parties because they tarnish the image of ancient Greece? While wasting time, energy and money fighting imaginary battles, like Santa pub crawls and the “War on Christmas†(as discussed last year in my Merry Christmas vs. Happy Holidays post), certain interest groups are missing the mark on where they’re truly needed. Like, I don’t know…maybe helping to end poverty, genocide or starvation? Ironically, a portion of the pub crawl’s profits are donated to charity.
How is a Santa-themed pub crawl one random night any worse than the materialism, commercialism and outright bourgeois nature that Santa takes on for months in department stores every year? If Coors or Bud were sponsoring the running of the baby Jesus pub crawl, well then maybe you’d have my support.
So, you may have read or heard about The Wall Street Journal’s article implying that Google no longer favors net neutrality. You might have also seen the reaction from the Open Internet Coalition, a group we belong to, explaining that Google actually does fully support net neutrality and that edge caching is not a violation of net neutrality. But, you might not realize that even if your headquarters aren’t in Silicon Valley, the difference between network prioritization and edge caching is important to your bottom line.
At ERA, we are strenuously opposed to the prioritization of traffic for commercial purposes (aka, the non-neutral net) because it will have highly negative consequences for our membership and for consumers. Say you primarily run infomercials and take many of your orders in call centers, but you also use a website for order taking. Or maybe you have a few products and you sell them online. Keep in mind at least 60 percent of ERA members generate a significant amount of their revenue from online sales. If we allow Internet Service Providers (ISPs) to prioritize certain types of content by literally sending the information more quickly, you will either need to pay for this service or the quality of your website will be degraded. That is, it will take users a long time to view the information you put online, they will likely get frustrated and go to another website that is in the ISP’s prioritized group.
The reason your website’s quality will be reduced is related to inefficiencies that occur from prioritization, as well as the fact that your traffic will have to wait for top-tier traffic to go first. But if you run a successful business, why should you worry? Shouldn’t you pay more and get a super-fast website that blows your competition out of the water? Well, even if you are a Fortune 500, there are 499 companies out there that will give you a run for your money. And in the end, the speed offered in the top-tier won’t be the Autobahn of the information super-highway that you were promised. It will still be a relatively slow end-user experience. That is partly because prioritizing traffic is one way that ISPs avoid investing in more capacity, which would keep the Internet fast for everyone. That would mean you wouldn’t need to pay more to stay competitive. It would also be good news for new companies that might be entering the market for the first time.
On the other hand, edge caching, the practice the WSJ article focuses on, does not degrade the quality of online traffic for everyone else. Edge caching allows companies to store information in a way that is closer to the end user. This improves the experience of the person watching a video or using a particular service provided by Google (or any of the many other companies that use this practice), but it does not cause any of the inefficiencies or raise any of the anticompetitive issues that result from prioritization. Most importantly, it does not degrade your content. Please let us know if you have any further questions.
Can you believe we’ve had this online community for a year already? Thank you to everyone who has read, commented, voted and contributed to this ongoing social dialogue. As we move forward, I thought it might be fun to look back at some of the more interesting, funny, thoughtful or even provocative posts from the past year. As we said from the get go in launching this blog: Join the discussion—we dare you!
Marketing the experience of ownership is critical in making the sale, whether it’s products in a store, catalog or website. With plenty of evidence to show that desire, more than product features, drives consumers, we need to further explore the creative opportunities to capture website visitors’ imagination in ways that will increase sales.
Every e-commerce website looks to engage and sell, but we need to look beyond such traditional formulas such as session length, page views and conversion rates to keep the customer experience fresh and profitable.
Get a Conversation Going
Use blogs to regularly update tips, trends and special offers conversationally—while cross-selling your product. It’s OK if your people write it; people will come back if they are entertained and informed. The Wal-Mart company blog is a great example.
Vox Populi
This Latin term for “voice of the people†has taken on a new life as user-generated content (UGC) at the heart of Web 2.0. If customers rate and review products on your website, tell your visitors about it. They can find out which products have the best reviews, and give feedback on prior purchases, as Amazon.com has so successfully shown.
PURLs of Wisdom
Personalized URLs (PURLs), web pages filled with merchandise based on the individual’s past purchase behavior, are proven to engage customers at a higher rate. eBay has created millions of unique PURLs that give up-to-the-minute deals on relevant products.
Sales in a Flash
Flash and other rich media can create a website to marvel at, like the Dutch department store Hema, which took a seemingly simple page of everyday products and created a fanciful display of flash genius that has been shared worldwide.
Learn Their Tastes
Marketers can dive into e-commerce with a wealth of customer data never before imagined. As sites like Netflix and the iTunes music store have shown, creating an intelligent, responsible recommendation system can create fantastic end results.
Add Sales Dimensions
More than just a basic selling proposition, customers want to visualize how the product will benefit their lives. Try a 360Ëš photo tour, video of your product in use, a full-screen view or colorization options.
…Worth a Thousand Words
Are you selling swimwear or a day at the beach with friends? You can take your visitors to an aspirational setting, where interactive environments can show valuable content and products. At the AT&T Blue Room microsite, visitors check out exclusives on music, sports, movies and more while surrounded by AT&T ads for DSL broadband and other related services.
eCatalog
eCatalogs are a hybrid vehicle that mix the page-flipping catalog experience with the click-and-buy e-commerce experience. Customers find the end result to be familiar, easy and fun, and multimedia can enhance the customer’s product consideration experience even further.
Effective as these methods are, you’ll need to tap their power with strong copy. Pictures invite. Words sell. Check out the Oh-la-la pants from the J. Peterman website—a terrific example of hard working copy powered by story.
One thing that is constantly bellowed from the mouths of talking heads at industry conferences is the need to be aware of what’s being said about your brand, product or company. That being the case, I thought I’d alert your attention to a site I came across recently:
Some mainstream media outlets like Fox News continue to shape this debate within their own agenda’s terms, such as cropping this photo in an online article to distort the poster’s actual message.
The poster actually read “We Will Not Fight H8 with HATE.†When it comes to California’s gay marriage opponents, I’m beginning to wonder—are they the ones actually playing with fire?
The Obama campaign has already received flattering press concerning its multichannel marketing and online efforts, especially considering McCain’s lackluster presence in those spaces. Much like in Obama’s case, those who voted no on Proposition 8 tend to be younger and more tech savvy than their “Yes on 8†counterparts.
California has seen an outpouring of demonstrations ranging from quiet vigils to noisy street protests against Proposition 8, including rallies outside churches and the Mormon temple in Westwood, as well as boycotts of some businesses that contributed to the “Yes on 8†campaign.
Many of those activities have been organized not by political professionals and established leaders in the gay community, but by young activists working independently on Facebook and MySpace. The grassroots activism is a tribute to political organizing in the digital age, in which it is possible to mobilize thousands of people with a few clicks of a mouse.
“There is an incredible outpouring of energy, of people wanting to do something†says Trent Thornley, a San Francisco lawyer who created his Facebook group, “Californians Ready to Repeal Prop. 8,†the day after the election. Thornley said his roommate told him to expect a few hundred people to join. Instead, a week later, the group has more than 200,000 members. Another Facebook group, “Repeal the California Ban on Marriage Equality 2010,†also has attracted more than 200,000 members. Many say the protests also mark the rise of a new generation of gay activists.
The Prop. 8 protest activities are more effective than old school protests because those unable to attend a rally can still donate money, join groups or send out messages that translate onto the Facebook homepage and news feed for all to see. Additionally, while only some might see the protests in the streets live, others on social networks are aware that they’re happening and are conscious of the numbers involved, regardless of how the media covers it. The implications are similar to the current outbreak of youth protests in Greece, which, according to The New York Times, the rioters used texting and websites to organize and communicate their responses against the police and other security forces.
When I pondered social media colliding with young, gay activists, my mind drifted towards “The Real World: Denver†cast member Davis Mallory. Throughout the show, Mallory strived to shed stereotypes by talking honestly about being both gay and a devout Christian. Since the show, Mallory has been using social media to continue his outreach on gay issues. “I was speaking on National Day of Silence, which is when people honor those that can’t come out around the world for fear of losing their life. I found out during the speech that picketers were there in the audience, and they started drilling me with questions. Someone filmed it all and put it on YouTube and titled it ‘Davis Mallory Twists Scripture,’†he says. Turning his opposition’s efforts on their head, he posted the videos to his Facebook and MySpace profiles because he felt his message was in tact, regardless of the video’s title.
Mallory believes the unexpected passage of Prop 8 was the kick in the butt that his generation of gays needed to get involved. “I never saw any viral videos about Yes on Prop 8. I saw tons of No on Prop 8 stuff. A lot of people’s Facebook status would be: check out this link or video, or you go on Perez Hilton and he’s linking things to other people. You go to YouTube and it’s one of the most visited things of the day,†says Mallory. He’s hopeful from the sense of community recent events have mustered with gay youth. Mallory still receives about a message a week via social networks from other gay kids telling him that he gave them the courage to come out. These efforts have real life economic effects, as well. “A lot of my friends have found out which companies have said yes to Prop 8, and they’ve agreed not to go to those restaurants or shops as another way of revolting. We finally as a community have found a cause and are doing something to fight for it.â€
This cyber activity isn’t limited to reality television stars. Mainstream Hollywood actors recently collaborated to create a video parody musical for Will Ferrell’s site Funny or Die, clearly in opposition to Prop 8.
Obviously, some will simply chalk this up to the Hollywood elite literally acting holier than thou, but there’s a bigger story here. This viral video has already gotten huge buzz and views. While people may not agree with it, they’re exposed to it, watching it and discussing it in ways not possible a few years back. The discussion of gay rights is no longer something kept inside one’s home, but has literally been brought to life through discussion boards and the like. Consequently, given the advent of Facebook Connect, those active in social media will be able to use their Facebook identities to connect with friends on various sites all over the web.
In the midst of all this, the California Supreme Court has decided to hear the cases filed against Prop 8. “Hopefully, we do continue to use viral videos and technologically savvy solutions to now show that it’s gone to the California Supreme Court and we’re trying to make a change. Obviously, it worked for Obama and it can work for us,†Mallory says of multichannel marketing efforts. While change won’t come overnight, if I was an avid “Yes on 8†supporter, I’d be concerned that I just awoke a sleeping giant.
Even staid JCPenney gets in the viral marketing game this holiday season with this short, “Beware of the Doghouse,” which uses sly humor and Internet-based marketing to spur clueless gifting husbands to visit their local JCPenney fine jewelry counter.
What do you think, folks? Will it work?
Rick Petry is a direct marketing strategist and creative services professional and a past chairman of ERA. He can be reached at (503) 740-9065, or via e-mail at rick.petry@me.com.
Should you be involved with multiple affiliate networks? Why or why not?
If so, how does it work technically—from a tracking, reporting and optimization perspective?
When it comes to affiliate programs, DRTV marketers are looking for more sales with less friction. I’ve complained for years that affiliate programs need a better means to achieve scale (providing marketers with an easier means to drive actions). Scale is Google’s “secret sauce†and responsible for cost-per-click’s (CPC) trouncing cost-per-acquisition (CPA). The CPC model has won that battle…for now.
In seeking out CPA scale (and the increased actions it may bring), DRTV marketers always find their way to the “multiple affiliate network†question—should they or shouldn’t they and what’s involved? Carolyn Tang has been around this block a few times and worked both sides of the fence at affiliates like MyPoints.com and marketers like Orbitz and CollectiblesToday.com (The Bradford Exchange). Today, she works as the client services lead at Chicago-based affiliate network Shareasale.
Simply stated, there are two primary concerns for retailers when swimming in multiple affiliate network ponds. These are:
1. Proper attribution of the sale:
Avoiding duplication of counts or scores among web marketing channels (affiliate, search, e-mail, etc.) 2. Proper payment:
Avoiding duplicate payments to affiliate networks (in scenarios where customers touch multiple affiliate sites or cookies)
Following is an excerpt from my conversation with Tang that gets to the nitty-gritty of what to be concerned with and how to make the decision.
Carolyn Tang: I think in the past, the emphasis has definitely been on duplicate reporting—on having to pay multiple times on a single transaction. Obviously, this is not very cost-effective. Funny thing is the technology has evolved to the point where we have a lot more reporting tools in place, such as Omniture or any third-party dashboard reporting tool. Many times, those tools don’t necessarily track correctly. They will attribute a transaction to a single marketing channel, but because of the way the technology is set up it may or may not attribute it to the correct channel. So I think, whereas before the driving concern was on overpaying on a single transaction, it is now on actually attributing the transaction to the proper channel.
Jeff Molander: So you’re saying that the technology now has improved that? (more…)
1) Smart organizations will continue to market throughout the downturn.
2) Marketing activities will be increasingly under the microscope and marketers will now be held accountable for their success or failure.
3) Marketers will turn to their website as the single most important and flexible lead generation and customer engagement channel.
4) Marketing programs that do not show a return quickly are not going to make it.
5) Mobile marketing has had a tough 2008, so 2009 will be a make or break year.
6) Marketers will act on a need to get more value from their existing CRM systems.
7) It is not about just creating content for the people, it is about getting content to the people—meaning multichannel, social networks and consistent marketing.
8) Companies will shift focus toward increasing revenue from current customers.
9) Digital media and social networks will continue to provide cost-effective delivery channels for customer messaging, but will be most effective when integrated with other marketing channels and analytically led.
10) With consistently tighter budgets, it will increasingly fall to marketers rather than IT staff to drive marketing technology. This will change the buying process for such systems and favor suppliers that have marketer friendly software.
Michael Fisher is Alterian’s senior vice president of commercial operations.
The Mobile Marketing Association (MMA) has released the results of its Annual Global Mobile Attitude and Usage Study, conducted with research partner Synovate.
The study’s key findings for the United States include:
—Mobile phone usage is fully integrated into Americans’ day-to-day lives and transcends traditional voice uses.
—Three-quarters report some level of mobile phone usage and roughly half feel mobile phones are highly important to daily life.
—Use of text messaging and mobile web services (80 percent & 20 percent overall) indicates consumers’ willingness to consider their mobile devices as more than traveling telephones.
—Mobile web usage has increased for the third year in a row. One-in-five reports using mobile web services and usage is highest among 18-24 year olds (37 percent report using mobile web to some degree).
—The most common mobile web activities are browsing the Internet, mobile search and visiting weather and news sites.
—Interest in mobile marketing is similar to that noted in 2007; roughly one-quarter overall are interested in the concept and are somewhat/very likely to opt-in to mobile marketing opportunities.
—Mobile couponing presents the best opportunity for mobile marketers. Additionally, consumers express moderate interest in ringtone, wallpaper and game downloads, and receiving information about new products and services.
—African Americans and English-dominant Hispanics represent a strong base of mobile usage. Compared to Caucasians, consumers in these segments report heavier mobile usage for both voice and text messaging functions.
For more information on the study or the MMA, click here.
During a Black Friday that left a Wal-Mart employee trampled to death on Long Island and two men shot dead in a Palm Desert, Calif. Toys R Us, one has to wonder what the problem is? Is it the economy, our avid consumerism or both? The Los Angeles Times quoted Palm Desert shopper Sara Frahm: “This is horrible. I’m never shopping on Black Friday again.”
Conceivably, it’s incidents such as these that will drive even more consumers to shop on Cyber Monday or other days during the holiday season.
Despite these tragedies, retailers can relish in the fact that sales weren’t abysmal. While it was the smallest gain in Black Friday sales in the last three years, ShopperTrak RCT Corp. found that retail sales were still up three percent over last year. As always, Black Friday and Cyber Monday remain intriguing points of discussion.
By drawing on the experience of traditional retail, and taking advantage of the unique opportunities presented by the Internet, e-retailers can look brightly at the future in spite of a gloomy economy.
“You Serious Clark?â€-Cousin Eddie, Christmas Vacation
So, you may have read or heard about The Wall Street Journal’s article implying that Google no longer favors net neutrality. You might have also seen the reaction from the 
Marketing the experience of ownership is critical in making the sale, whether it’s products in a store, catalog or website. With plenty of evidence to show that desire, more than product features, drives consumers, we need to further explore the creative opportunities to capture website visitors’ imagination in ways that will increase sales.
One thing that is constantly bellowed from the mouths of talking heads at industry conferences is the need to be aware of what’s being said about your brand, product or company. That being the case, I thought I’d alert your attention to a site I came across recently:
Some mainstream media outlets like Fox News continue to shape this debate within their own agenda’s terms, such as cropping this photo in an online article to distort the poster’s actual message.
Even staid JCPenney gets in the viral marketing game this holiday season with this short, “Beware of the Doghouse,” which uses sly humor and Internet-based marketing to spur clueless gifting husbands to visit their local JCPenney fine jewelry counter.
Should you be involved with multiple affiliate networks? Why or why not?
1) Smart organizations will continue to market throughout the downturn.
The Mobile Marketing Association (MMA) has released the results of its Annual Global Mobile Attitude and Usage Study, conducted with research partner Synovate.
During a Black Friday that left a 
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