Myths About Online Retail Marketing

Kelly Mooney Debunks the Overheard and Overused

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Kelly Mooney Kelly Mooney
It's never been more important for stores and web teams to work together, driving growth and opportunity for the total brand. I spent the first 10 years of my career in retail planning and design and the last 15 in digital marketing and e-commerce. And I am surprised to still overhear oft-outdated assumptions being made about the web -- so here goes my attempt to debunk them.

Overheard: Web sales remain too small to matter.
Many retailers downplay the significance of the web because it's just 2%, 5%, even 15% of sales. Might not seem like much until you consider that it's a snapshot in time. While retail growth is relatively flat overall, the web is growing five times faster than stores -- with a projected growth of 14% by 2012 (per Forrester) driving a disproportionate amount of retail growth.

Still think it's too insignificant to matter? Ask retailers like Talbots and Staples. These are just two examples where the web represented a smaller piece of total sales but the largest percent of total sales growth. In fact, in was the web that rescued both brands this holiday season.

Overheard: The web is primarily an e-commerce channel.
Maybe you think of the web as e-commerce. Well, that's only partly true. The web also impacts cross-channel shopping. In our research with Sterling Commerce we found that in some categories, such as home electronics, the web has begun to rival stores for decision making, and, in turn, rivals offline in importance. For home electronics, buyers rated stores and online equally in terms of importance, while 7% of respondents felt online was "absolutely essential" when making an apparel purchase decision.

Overheard: Advertising dollars are being judiciously shifted to the web.
With evidence mounting about the importance of the web as both a growth channel and an influencer, it would be a small leap to assume that more dollars are shifting to the web. Shifting, yes. Judiciously, no. And why not? Let's look at where we spend our time -- shouldn't the dollars follow? Consumers' time spent online is outpacing web advertising. Sure, we're still fond of watching television, but skipping through commercials. Viewing time has shrunk 20% in the last 10 years, while time on the web has grown eight-fold in the same time period (Forrester).

Gap made headlines last summer when it cut advertising costs by 18% and watched profits soar by 40%. Why should we all take note? It made a data-smart spending move, by reducing ad spending where customers weren't paying attention. Even P&G continues to experiment, dropping traditional media by 19% and increasing digital as much as 10%. It's a spending shift. Brands need to re-assess media spending to align more with consumers.

The web is no longer for extending campaigns when (and if) there's leftover budget. Consumers start with the web or end with the web -- and increasingly do both. Maybe your company is making traction with the digital channel, or maybe you have a merchant prince at the helm and stores are still the king of the retail kingdom. Do you think the power of the digital channel is known, embraced and leveraged inside your organization? Or do you sometimes find yourself surprised at the way your organization still views the web?

The internet is already working on your new strategic imperatives, whether you realize it or not. But maximizing its potential might call for a business realignment. Brands need to move the digital channel toward their internal center of gravity, where it can radiate out to integrate and improve all consumer touchpoints, including the in-store experience.

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Kelly Mooney is president of digital-marketing agency Resource Interactive and author of "The Open Brand."

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