Web effort, take 2

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Brick-and-mortar retailers finally are learning how to click on the Web.

Traditional retailers rushed online under Wall Street pressure during the dot-com boom. In the wake of the dot-com bust, a number are beginning to look at the Web with more considered, rational strategies.

In the electronics sector, Best Buy Co. urges consumers to "do your homework" online and then go to the store, via a campaign produced in-house. Print ads will be supplemented with two TV spots backing online research, one for the holiday season. "Our research shows in-store consumers have a better shopping experience" if they have visited the Web, said spokesman Barry Johnson. Best Buy believes 20% of its Web visitors show up at the stores.

Rival Circuit City Stores is running a spot showing a hurried couple stopping at a store with a shopping list developed online. The spot from Interpublic Group of Cos.' Foote, Cone & Belding Worldwide, Chicago, indicates the couple saved time accomplishing chores.

Circuit City hopes to use the Web to draw customers into stores. Under a pact announced last week, Amazon.com customers searching for electronics products will see offerings from Circuit City as well.

"Amazon.com has 35 million unique customers, a large base of new customers Circuit City can offer our products to," said Circuit City spokesman Bill Cimino. He said Circuit City may expand the agreement to provide Amazon.com items such as music or movies at its stores. "Over time, this could build to something more."

Sears, Roebuck & Co., which found one of 10 of its major appliance purchases is influenced by the Web, has adopted what Exec VP-Marketing David Selby calls a "channel agnostic" approach in its battle for market share. "The Web is a solid driver of revenue and influencer of brick-and-mortar traffic," he said.

Other retailers are trying to put some of the Web's more successful dot-coms to work for them. J.C. Penney Co. has been experimenting with selling overstock and clearance goods on auction site eBay.

Toys `R' Us, after a rocky cyber start during the 1999 holiday season, last year turned online duties over to Amazon.com. "Our job this year is to bring in the best elements of e-tailing as we see them," said Warren Kornblum, Toys `R' Us exec VP-worldwide marketing.

Rival eToys went bankrupt in March. Retailer K-B Toys bought its URL, which now redirects shoppers to KBkids.com.

All the moves come as most retailers have cut back significantly on Web efforts after the dot-com collapse. "Retailers are taking a prudent step-by-step approach," said Howard Davidowitz, chairman, Davidowitz & Associates, a New York retail consultancy.

Other Web watchers, such as Ken Cassar, senior analyst at Jupiter Media Metrix, said retailers no longer face the threat of competition for sales and market share from e-tail pure plays and as a result are scaling back. Discount giants Kmart Corp. and Wal-Mart Stores have taken full control of dot-com joint ventures and have significantly reduced online staffing, he said. Book retailer Borders has "dramatically cut back spending" on the Web after teaming up with Amazon.com, he said. Borders.com relaunched this month as a co-branded site.

Retailers facing the tough economic environment will appreciate any help the Web can offer in ringing the cash register. U.S. Web retail sales are now above 1% of overall retail sales, with online sales of $24 billion in 2000, according to Jupiter Media Metrix. It predicts that will rise to $130 billion by 2006.

"Brick-and-mortars are in the process of beginning to get the Web," Mr. Cassar said. "I'd hesitate to say they yet appreciate the full value of the Internet."

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