The Web Gets Back To Basics
Use the Internet to increase your bricks-and-mortar sales.
By Meredith Schwartz -- Gifts & Decorative Accessories, 12/1/2000
When Internet companies talk about driving traffic, they usually mean attracting visitors to a Web site. But the latest trend in online marketing can make the phrase literally true, by using the Web to bring customers to your store in person. Not every retailer is ready to sell on the Web: It takes money, time, and technical know-how to make an online store work. And not every retailer's customer base is ready to buy online: Concerns range from security of credit cards to unreliable photo images to shipping costs. By far the most commonly adopted Internet technology is e-mail, and by far the most common use of the Web for shopping is to research information before making an offline purchase. So even if you don't want to take a chance on e-commerce as the wave of the future, you can still take advantage of the ways shoppers are using the Web right now.
The most common way to do that is through e-mail, the Web's version of direct-mail promotion. Of course, you can simply write to your customers from any ordinary e-mail program, and that's certainly an option to consider, especially if you're on a tight budget. However, enlisting professional help can save time and guesswork, and leave a more polished, professional impression. Online marketing companies can help manage your mailing lists, so you contact only current customers who are interested in a particular line or event. They can take care of the opt-in or opt-out mechanisms that are needed to prevent your e-mail being resented as "spam" by its recipients. Depending on the service, they can also help with wording and graphic design, and some also offer special features that would be very expensive and difficult to do otherwise. These include surveys, sweepstakes, coupons, and even a miniature online storefront that can take orders for a featured product or two right inside your customer's e-mail inbox.
Other ways to use the Web to promote your bricks-and-mortar store include online listings, directories, and centralized special-offer sites that allow consumers to search for products and services in their area from their computer, Palm Pilot, or wireless phone, and mapping and direction services that help them get to you. Here are some companies that might help you use the Web to build your bottom line. Prices vary dramatically, so there's a solution for every budget.
Eversave.com
Eversave.com, Woburn, Massachusetts, is a direct marketing company focused on the bricks-and-mortar world. "We really feel that the local side and the offline side are the big opportunity here. Our own research and the Forrester group's indicate that 90 percent of a person's disposable income is spent within 20 minutes of their home, as opposed to sales on the Internet, which account for only 0.5 to 1.5 percent of all sales. Consumers are using the Internet to research products; going online to organize their offline world." said Jere Doyle, president and founder of Eversave.
The site, which launched in January 2000, has about one million registered members from all over the country, who have stated where they live and what they like to buy. Eversave e-mails them one to five times a week with special savings offers and things going on in their local areas that match their consumer profiles. The service is opt-in: Eversave sends e-mail only to people who request it. Because it is so targeted, the company reports response rates as high as 30 percent, with a click-through rate of 5 to 15 percent. The cost to a single-location store is $350 per year. Merchants with multiple locations get discounts based on the number of stores. The annual fee buys three offers, plus an informational page about your store, hours, logo, etc. Because this is cheaper than direct mail, retailers can put more money into the offers. In addition to signing up merchants directly on its site, Eversave partners with traditional media companies such as TV and newspapers, so that when they sell advertising to local merchants, they have an Internet coupon and direct e-mail they can bundle into their packages.
www.eversave.com
Coupons.com
Coupons.com, Palo Alto, California, offers shoppers printable coupons for both national and local retailers. Local retailers can take advantage of the service in two ways. First, the site carries all of the Valpak content, plus Coupon Clipper magazine, My Clipper, and other local content. Any retailer that signs up with these local coupon providers also gets a presence at Coupons.com at no additional charge.
Second, the company is rolling out a complete promotions Web site this month. The new site will let local merchants put an offer in their local zip code directly. At press time, pricing was still in the planning stages, but CEO Steven Boal, whose mother had a small chocolate shop for years, is determined that it be low, so that small businesses who have taken the time to seek out Coupons.com not be priced out of the service. The cost will probably end up somewhere between free to $10 for the retailer's own zip code. The offer can be extended to additional zip codes for approximately $5 each.
"I don't see a time where we're charging more than $10. It doesn't cost more than $10 to support that," says Boal. "That is what technology allows you to do. There are certainly companies that will charge you a lot and use technology as the reason, but in fact the technology allows you to be lean and efficient, and if you pass those savings on to the people that use your service, everybody benefits. It definitely works out well for us: It builds more content, which keeps consumers happy, and for the retailer it drives more traffic into their stores. If one person walks in with a coupon, it's essentially paid for itself."
A local offer isn't as taxing as a national one, Boal explains, because it doesn't need all the bells and whistles of print-at-home gift certificates, barcodes, and tracking redemption statistics, fraud, misredemption, or consumer duplication.
Coupons.com also aims to make the process quick and easy. If a retailer wants to renew his offer every two months for a year, he never even needs to return to the site: It happens automatically. And how effective is it? Boal reports that the company's typical coupons have over a 10 percent redemption rate, which is very high. The site has large market penetration in rural zip codes, because the company advertises substantially in coupon circulars in local newspapers, as well as via other print advertisements and its 30,000 Web site affiliates.
www.coupons.com
IQ.Com
IQ.com, Saratoga, California, is a marketing company that provides online promotions, such as e-mailings, electronic coupons, mini storefronts, and gift certificates. The company's core solution is very customizable, but probably too expensive for most independent retailers, and offers more options than they need or have time to sort through. So while targeting its initial product to large- and medium-sized companies, IQ.com has also teamed up with Intuit, Mountain View, California, to offer a version that's tailored to the needs of smaller businesses.
Intuit, the supplier of the popular Quickbooks and Quicken accounting software, boasts more than six million small business customers. Ted Patton, director of marketing at Intuit, has his finger on the pulse of the market: "People know there's this World Wide Web out there, but they don't know how it will help them with their business, and they don't have a lot of time to find out. So we've got to show value, be effective right away, or we will lose them. If you force small businesses to do something in a different way, you'll never get them as a customer. You have to make them feel smarter as they use it, not stupider. People are nervous about this e-commerce stuff, but they see other people having success, so they want to try. But they want to take baby steps, not spend thousands of dollars. They're not interested in technology, they're interested in being a gift store. You have to show them how it will help them do better in their business, not just that it's cool."
Intuit and IQ.com will offer basic informational e-mail to begin with, such as new product or event announcements. Customers can import e-mail addresses from Quickbooks, Outlook, other sources, manual entry, or a combination. A key selling point is courtesy: the e-mail has a finished, professional look and pays scrupulous attention to customers' privacy concerns. Retailers can also preview and test the mailing before sending it. "Retailers understand the concept of e-mail, unlike Web directory or banner exchange, which rarely get to their area and never their customer base. It's a bridge between what's very advanced on the Internet and the way they're used to doing business in their stores today." says Patton. "When we've talked to the big retailers about what works best versus what doesn't, they said the number-one highest return on investment vehicle for reaching their customer base is e-mail. Everything else pales in comparison."
Over time, IQ.com and Intuit plan to offer most of the fancier promotional features of IQ.com's main product in the small business version as well, so retailers can send a coupon, a little storefront that accepts orders, a gift certificate, and more. Retailers won't need training to use the program, or any equipment besides a computer with a connection to the Internet. It doesn't have to be done by business owners or technical people. The product is still in development, but should be available early next year.
Pricing, too, is still on the drawing board, but will be in accordance with Intuit's general performance-based pricing philosophy of giving a fair trial price, showing value as the user goes along, and as the customer starts to like the product and use it more, pricing it accordingly. Customers will be able to tell how much the system is worth to them, because they can test it for limited dollars and get immediate feedback on how successful it is.
www.quickbooks.com
www.IQ.com
EyeonMarket.com
EyeonMarket, Chandler, Arizona, connects retailers and manufacturers to consumers who are browsing online, but looking to make the purchase offline. The company serves retailers of all sizes: "Anything from a mom and pop to super Wal-Marts," says Mary Ann Butcher, director of sales, who describes the site as "kind of like the Yellow Pages on steroids." The site, which is owned by computer giant Intel, launched on September 20. Consumers visiting EyeOnMarket.com see not only the store's address and phone number, but pictures, information, sale dates, coupons, rebates, and more. Information is targeted to one city, zip code, or range of zip codes. EyeOnMarket generates these pages from information in whatever form the retailer has it, whether XML feeds, EDI, faxes, e-mails, spreadsheets, or even store circulars. Another advantage, says Butcher, is that the company can turn the information around in a matter of hours and get it online. The director of technical services will sit down with companies and hold their hands through the process of creating an online presence from the information they have, says Butcher, while a call center is on hand to answer more basic questions.
To reach retailers, particularly the mom-and-pop stores that Butcher describes as the backbone of retail, EyeOnMarket is working with Penny Saver, the advertising flyer, and mall organizations that already have relationships with hundreds of retailers, as well as putting its b-to-b info up on a separate site. To reach consumers, the company turns to partnerships again, this time with major portals such as infospace.com, which feeds up to 2,500 other portals, and mycity.com. Consumers won't have to visit EyeOnMarket.com: They'll visit their favorite sites, and the shopping tab will be powered by EyeOnMarket.
The most basic listings are free, and contain a store's name, address, phone number, items on sale, and the sale dates, as well as a URL if the store has its own Web site. The listing automatically comes down at the end of the sale, to avoid out-of-date information. For more elaborate listings, the cost varies by market, like traditional media buys. In the top ten markets, it might be $300 to $500 a month. Smaller markets are less expensive. Price also depends on the level of site. A rich listing that includes images, logos, expiration dates, model numbers, and as much info as the retailer likes, goes for $200 a month in a smaller market and $300 in the top markets. Retailers can list as many products as they choose, up to their entire inventory. The site had 100,000 product listings at the end of November, spread across every market in the country, though with more saturation in the major markets. And, says Butcher, "We envision ourselves as being the largest product catalog in the world over time."
In addition to being on the Internet, EyeOnMarket can get retailers on the wireless network, where on-the-go consumers can access nearby resources from their Palm Pilot or Web-enabled cell phone. The company provides consumer behavior reports to tell retailers how many shoppers were driven to their listing, how many clicked through, and what demographics they belonged to. And in a few months the site will add "closing the loop technology," where customers reserve an item online, then go to the store to pick it up, and there will be a number to show it was found through the EyeOnMarket network. For more information, call (888) 465-6166.
www.eyeonmarket.com
www.eyeonmarket.net
CoolSavings.com
CoolSavings.com, Chicago, launched in 1997, with a business model based on the belief that you can drive traffic into bricks-and-mortar locations via the Web. When the e-commerce revolution hit, the site broadened its mission to include e-tailers as well, but offline retailers remained the focus. Kelly Corroon, Coolsavings.com's senior vice president of marketing, says, "$635 billion will be driven to bricks-and- mortar stores specifically by the Internet. There's a lot of press about customers buying online, but more often than not they use the Internet to research purchases in multiple channels. It's an exciting tool."
Coolsavings.com gathers demographic information from consumers when they register, and targets offers to its members based on that data, plus all the activity they do on the site. They can target an area code or a zip code, but also the geographic trade area a customer most commonly shops in, the specific channel, a smaller region, a specific gender, only shoppers who select offers from offline retailers, or category preferences. The company even does some member segmentation and predictive modeling to build profiles of customers who would respond best. And retailers can overlap multiple criteria to target only their core audience: such as shoppers in their zip code who like collectibles and shop offline. Since Coolsavings.com's cost is in the sorting, not the mailing, pricing is based on the number of criteria selected. So unlike physical direct mail, it may well be cheaper to mail to a larger audience.
To put out one offer to 20 percent of the 10.5 million member database, for example, costs $4.25 per thousand, with a minimum of $3,500. Despite its high price tag, Corroon insists independents are not priced out of the market. "We do have a number of local players; the mom-and-pop offers do extremely well on our site because members are looking for relevant local offers they can use immediately, and they know the store, it's around the block. The local content does really well and we're constantly trying to add more." She points out that the advertiser has no additional costs: Coolsavings does all the creative work as well.
Coolsavings.com sends out at least two e-mails a month, tailored to the recipient's activity and profile. Advertisers place specific incentives such as a coupon, rebate, loyalty point, or sales notice on the site. Client services reps work with advertisers to determine which incentives are most likely to motivate their target customers: coupons, sample or free trial, a sale, or a grand opening notice. Retailers restrict the number of coupons per household that can be redeemed. The site is personalized and dynamically generated, so consumers see offers generated to their profiles. This targeted strategy results in much higher conversion rates than traditional direct mail or advertising. Category newsletters see 9 to 20 percent click-through rates.
www.coolsavings.com
BrightStreet.com
Brightstreet.com, Cupertino, California, focuses on driving traffic from online to offline using mapping, tell-a-friend, couponing, survey, and sweepstakes technologies. Brightstreet builds, delivers, and tracks these services but mirrors the retailer's look and feel, so consumers never know they've left the retailer's site. Retailers create their own newsletters, and include a link to a special offer, handled by Brightstreet. At the moment, Brightstreet's services are all customized, and include setup, maintenance, and reporting, making the licensing fee prohibitive for all but a national chain or a Hallmark-style franchise, coming in at about $100,000 per year.
However, within the next six months to a year the company hopes to have a solution for small retailers. This would be a less customized, more "cookie-cutter" solution that retailers could sign up for, create, and pay for online themselves, instead of needing to work one-on-one with a salesperson. For more information, check the company's Web site in May 2001.
www.brightstreet.com
As retailers and consumers become more familiar with the power of the World Wide Web, they are beginning to understand that it isn't a technological wonder that is going to replace traditional buying and selling. Instead, they are learning that it is a technological wonder that can enhance traditional retailing. Driving traffic to bricks-and-mortar stores is just one way the Web can serve both the retailer and the consumer.
