Cybershift

The latest trend in e-commerce: real stores.

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 took to the radio with in-your-face spots. Excite, Snap!, and Cyberian Outpost graced TV with equally aggressive commercials. But now it would appear that a slowly growing number of online-first companies are building their marketing strategy with a combination of pixels and mortar. Gourmet pasta Web site the Flying Noodle (www.flyingnoodle.com) found that a number of people receiving its products were being given them as gifts, and thus were not 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 (www.garden.com) launched Garden Escape magazine on March 8. Published by magazine veteran Primedia, Garden Escape has articles annotated with detailed information on how to purchase featured products through the Garden.com Web 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 (www.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 chair 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."

Reel.com (www.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 rental, in-store promos push Reel.com for video sales.

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 (or involuntary) online shoppers to a business's 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."

Frank Catalano, a marketing consultant and market analyst for Internet and computer industry companies, is the co-author of Marketing Online for Dummies. He can be reached at mailto:catalano@catalanoconsulting.com.

 
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