Marketing strategy for the online holiday season
Even the Web's virtual store windows are getting cleaned up.
'Focused and simplified'
"Sites are more focused and simplified," said Sean Kaldor, vice president of analytical services at NetRatings, the online research company. Retailers have come to realize cyber-shoppers want "prices and basic information," not necessarily content that gets "in the way of what they want to do," he said.
Ken Cassar, senior analyst at research provider Jupiter Media Metrix, said e-tailing has gone full circle. "In 1996, it was all about brochure ware. Then in 1998-99, the focus shifted to a transactional channel," he said.
In a healthy development, Mr. Cassar said, this holiday season finds the Web evolving "to more sophisticated uses," such as
Dave Karraker, director of marketing communications for Kmart Corp., termed Bluelight.com's strategy Marketing 101.
"Last year, we were like the gingerbread man, running, running, running as fast as we could" with a flurry of promotions, he said. "The bells and whistles are pretty much gone" this year. The Kmart-owned site now echoes the retailer's everyday-low-price turnaround strategy. Consumers no longer need to "hunt and peck for promotional codes or coupon codes," Mr. Karraker said.
Competitor Target.com's biggest bell this season taps a Web strength: a new online wish list. Just as catalog merchants such as L.L. Bean and Lands' End have found success on the Web, Target.com also will mail out its first catalog, a 48-page direct piece.
Cathy David, vice president and general manager at Target.com, said another goal is to eliminate online shoppers' expectation of entitlement. Consumers, she said,
Free shipping will be offered only as a perk in some promotions, many requiring use of the Target credit card. The tactic of requiring store credit card purchases for additional discounts has become popular with a number of retailers, including Federated Department Stores.
"We never looked at the Web as [exclusively] a selling media," said Ms. David. Target views its dot-com unit as a way of enhancing the brand and driving more guests to the traditional store, she said. For example, a new affiliation with Amazon.com features Michael Graves' Target products as part of Amazon.com's kitchen offerings, exposing them to a new audience.
No more 'singing sweatermen'
For the past two years Amazon.com had TV spots featuring the "singing sweatermen." This year, the online retailer will have a print-only campaign from new agency Wieden & Kennedy, Portland, Ore. Amazon.com parted with Interpublic Group of Cos.' Foote, Cone & Belding Worldwide, San Francisco, in December 2000.
Wal-Mart Stores' Walmart.com will have limited free shipping for only certain items, but never storewide, a spokeswoman said. An offline ad campaign specific for Walmart.com also is under consideration via Omnicom Group's GSD&M, Austin, Texas.
Other basic online strengths being exploited are the integration of shopping online and picking up product at stores. In time for Thanksgiving, Sears, Roebuck & Co., will offer same-day pick up at a nearby store for the majority of its online offerings, excluding jewelry, wireless phones and gift cards.
Confidence low, unemployment high
Although online retailers at the start of the all-important holiday season hope to limit promotions, analysts doubt the strategy will hold. Retailers knew confidence was low and unemployment high when they made inventory purchases before Sept. 11. Still, they are "probably overstocked," NetRatings' Mr. Kaldor said. E-tailers are "desperate for revenue," he said. "The next few weeks will see aggressive pricing."
Already, AOL Time Warner's America Online, which has published its first holiday gift guide direct-mail piece, is touting a "deal of the day" on its site, an offering culled from its online mall.
Keeping a handle on promotions is not the category's only problem. In Christmas' past, online retailers ignored fiscal responsibility in favor of growth, offering large selections at deep discounts. Now, fiscally constrained online retailers risk losing customers likely to be disappointed with selection and price.
Although the terrorist attack may have given some shoppers pause about going to crowded malls, a post-Sept. 11 survey clearly indicated consumers were not flocking to online shopping either, said Mr. Kaldor.
The anthrax issue also is clouding an important element of online customer service: product delivery. "If shipments are disrupted, [online retailers] will have to deal with customers' wrath," he said.
"It's not," Mr. Kaldor said, "like any past season."