Where is the Online Game?

Hot Tips from ICE (Internet Commerce Expo)
by Elaine Morris Palmer, February, 1999

As seen in Zcommerce Online and WebPromote Weekly

Portals are all the buzz. But is associating brands with portals going to have longevity? Particularly when everyone’s a portal? The big issue, then, is the exclusivity of the deal. Or is it? Marketers pay dearly to do that, but how long is it worth doing? And how exclusive is any deal, really? Besides, portals don’t know about e-commerce marketing. You still have to be pro-active about using all the marketing tools you’ve got. These were just a few of the questions and issues debated at last week’s Los Angeles Internet Commerce Expo.

Just as in the formula for the brick-and-mortar model, revenue = dollar spent per square foot, there is an equivalency in the virtual world. Here and now, though, the value rests in the relevancy to you, the marketer.

Granted, the World Wide Web is a profound selling tool. It’s been called “a highly distributed total selling activity.”  Some say shopping on the net is like shopping anywhere. Consumers trust the brand and the reputation of the seller. But what of the differences? Products we understand like books, CD’s and stocks work. Dry goods even work.  But not so for luxury and touchy feely goods. Somehow brands and branding operate on a slightly different set of rules. Well-known national brands have bombed. While unknowns starting out as web enterprises thrive. Converting customers from brick-and-mortar to virtual sometimes works, sometimes doesn’t.

The #1 reason people buy online is convenience.

And, according to Mark Gibbs, Principal, The Change Council, “watch your gender bias!” The demographics are shifting rapidly to women. And retailing is indicative of directions in the marketplace. Who’s buying? The audience is balanced men to women. Average age: mid 40’s. Average income: $42,300.

Whichever way you look at it, the good and the bad news is: the Web has become mainstream. Information, technology and strategy are the elements says John Patrick, VP of Internet Technology at IBM and Keynote speaker at this year’s conference. Patrick forecasts “pervasive computing” where consumer devices will merge with PCs. We are talking connecting a “heterogeneous world where trillions of things NOT hundred of millions of desktops” will carry information of some kind or another. And a pervasively connected world will mean distributed content management will count.

The Foundation Issues for the growth of the Internet, according to Patrick, come down to 1) governance, 2) security, 3) content labeling, 4) privacy and 5) infrastructure. Issues on the horizon: Ease of life, or making life easier for your constituencies. Is your use of the Web facilitating tasks or making them the same or even more difficult?  Functionalities like peer-to-peer messaging (which supplements, not replaces email) and instantaneous communication mean insight becomes the competitive advantage.

For those starting out, the watchwords are start smart, early and small. The reality is there’s no immediate return on investment for most.

  • Spend proportionately to the market you are in. For the Cokes and Pepsi’s of the world, it’s undeniable — they must be on the Web. It’s about exposure. You may need just a bookmark on the Web for now with a watchful eye on where it’s going.
  • Analyze what processes you use to do business in your organization. For example, how responsive and adaptable are you? As market conditions change your flexibility to change with them is critical.
  • How well are you practicing security? As your business processes are exposed, how well are they integrated with electronic functions?
  • Be careful how you change market dynamics. Educate your existing distribution channels about what you are doing or you will work hard to repair those relationships. And lastly,
  • What knowledge is in the heads of your employees? How do you solve the problem of getting information to your people and then back to you? Do they know what you are doing and are they comfortable with what they are doing?

For those already here and wondering how to compete effectively, what presence do you want to communicate on the Internet? Does it match your corporate objectives? The keys to electronic business seem to be understanding the difference between presence, content and presentation. Content and presentation being the functions of the first.

After that, to Laurie Windham, President and CEO of Congnitiative, Inc., “the metrics for success on the Web seem to be the same as in the analog world: a compelling selling proposition, a well-developed growth path, sound business strategies, and the ability to execute a brand.”  But we’re using a different set of rules here, remember? Well, yes and no. It’s mostly about expectations: when, not If.  The formula for Windham is growth = traffic = customer = offset costs. Or put another way, volume = lower cost per transaction = profitability. She evangelizes: “Build brand. Build loyalty. Build leadership.”

The burning question still remains. HOW? Who’s out there and what do they want from us? The challenge to overcome, in most cases, is ourselves. The World Wide Web is a facilitator and a meeting place. The competition is the physical world. Facilitate exactly what the physical retailers have: the customer’s trust, contact information, a place to browse before they purchase. Plus give the customer a unique and rewarding experience. Make the experience so different, it’s worth going online to do it. For example, offer instant online credit not just instant approval. Find distribution partners, not media partners — make reach contextually relevant.

So, how do we reach, convert, retain? Says Windham, leverage these:

  • Selection: Retailers are confined by shelf space. Your selection can be infinite.
  • Information: Advise and educate.
  • Personalization: Customize the experience.
  • Fun: Make the environment intriguing. Surprise the customer all the time.

Some tips from one of my personal gurus, Seth Godin, President of YoYodyne:

  • Online promotions are still extremely powerful. The premise, “Come here and I’ll give you something” works. “And while you’re here, there’s something else I want to show you.” also works.
  • Merchandising is important. It’s okay to not have a buying-driven site if you’re selling something people have to have. If you’re not, you have to sell it to them. Customers don’t like being in charge.
  • Change your page as often as every day if you can. Don’t “set it and forget it.”
  • Reward the customer each time he clicks through to the next page.
  • Test everything.

Lastly, a few don’t’s:

Don’t repurpose your catalog.

Don’t try to be everything to everybody.

Don’t upset your customer when you’re trying to get information from him.

Don’t ask for something you don’t need.

Don’t blow their trust

Don’t put Customer Service out there without integrating back to marketing, engineering and content.

Don’t just trust data. Talk to the customer.

Don’t forget your disclosure notice. If you’re selling data, say so. The FCC is watching.

Conference Predictions:

“If marketing is about relationships, then Amazon’s got to have stores sooner or later.”

“Online malls are dead.”

Contact Elaine Morris Palmer – elaine@mavenmediany.com