262 CHAPTER 10 CHANNELCONCEPTS:DISTRIBUTINGTHEPRODUCT
anelectronicstorefront.Thelasttwooptionsrepresentalternativeformsofretailing. Today,
more than40,000businesses haveestablisheda homepageontheInternet,manyofwhich
serveaselectronicstorefronts.OnecanorderclothingfromLands'EndorlC.Penney, books
fromB.DaltonorA.mazon.com, orflowersfromLehrer's Flowerstobesentanywherein
theworld.Essentially,a companycanopenitsownstoreontheInternet.
Companiesandindividualscanplaceadsoncommercialonlineservicesinthreedif-
ferent ways.First,themajorcommercialonlineservicesofferan adsectionforlistingclas-
sifiedads; theads arelistedaccordingtowhentheyarrived, withthelatestonesheading
thelist.Second, adscanbeplacedincertainonlinenewsgroupsthatarebasicallysetup
forcommercialpurposes.Finally,adscanalsobeputononlinebillboards;theypopJpwhile
su)scribersareusingtheservice,eventhoughtheydidnotrequestanad.
Catalogmarketingoccurswhe:lcompaJliesmailoneormoreproductcatalogsto
selectedaddressesthathavea highlikelihoodofplacinganorder.Catalogsaresentbyhuge
general-merchandiseretailers-lC.Penney's,Spiegel- thatcarrya~u111ineofmerchan-
dise. SpecialtydepartmentstoressuchasNeiman-MarcusandSaksFifthAvenuesendcatalogs
tocultivateanupper-middleclassmarketforhigh-pliced,sometimesexoLcmerchandise.
INTEGRATED MARKETING •
THEDEATHOFRETAILINGGREATLYEXAGGERATED
Recently,theMITeconomistLesterThurowsuggestedthat
e-commercecouldmeantheendof 5,000yearsofconven-
tionalretailingifonlinestorescancombinepriceadvantages
witha pleasantvirtualshoppingexperience.Let'sfaceit:the
growthofmallsandmegastoreshaveshownthatpeoplewant
selection,con.venience,andlowprices,andthat'saboutit.
Sure,peoplesaythey'drathershopfromthemom-and-pop
onMainStreet.' Butifthejunkchainstoreoutonthehigh-
wayhasthosecurlingironsfora'dollarless,guesswherepeo-
plego?
Soa fewyearsinto .thee:COlrunerce revolution, hereare
a fewobservationsandpredictions:
- Onlinestoresne~dtobecomeeasiertouseaswellas
completelytrustworthy.
- Ifpeoplecangoonlineandgetexactlywhattheyget
fromretailstoresforlessmoney,thatispreciselywhat
theywilldo.
- Somestoreswillhavea kindofinvulnerabilitytoonline
competition;i.e.,storesthatselllast-minute itemsorspe-
cialtyitemsthatyouhavetose e.
- Retailstoresmayimprovetheirchancesbybecoming
moremultidimensional;i.e., theyhavetobefuntovisit.
Still,noteverythingis rosyfore-tailers.Researchprovides
thefollowinginsights:
- Fornetupstarts, thecostpernewcustomeris $82,com-
paredto$3I fortraditionalretailers.
- E-tailers' customersatisfactionlevels were: 41 %forcus-
tomerservice; 51 %foreasyreturns;57%forbetterprod-
uctinfonnation;66%fprproductselection;70%for
price,and74%foreaseofuse.
- Repeatbuyersfore-tailerswas 21 %comparedto34%
fortraditionalretailers.
Suggestionstoimprovetheplightofe-tailersincludethe
following:
- Keepit simple.
- Thinklikeyourcustomer.
- Engagein·creativemarketing.
- Don' t bloweverythingonadvertising.
- Don'tundercutprices.
Whileallthisadviceis good,therecentrollercoasterrideof
high-techstocksanditsdisappointingresultsfore-tailershas
completelychangedthefutureofe-tailing.Whilee-taiIershaVe
spentabout$2billionindustry-wideonadvertisingcampaigns,
theyoftendevotefarlessattentionandcapitaltothequality
ofservicestheirprospectivecustomersreceiveoncetheyarrive
onsite.E-tailers arelearningwhatbrickandmortarretailers
haveknownallalong,thatsuccessis lessaboutbuildingmar-
ketsharethanaboutsatisfyingandretainingcustomerswho
cangeneratesubstantialprofits.
Sources:HeatherGreen, " ShakeOutE-Tailers,"BusinessWeek,
May 15 , 2000,pp.103-106;EllenNeubome, " It 's theService,
Stupidi'BusinessWeek,April3.2000.p.E8;Chris Ott; "Will
OnlineShoppingKillTraditionalRetail?"TheDenverBusiness
Journal,Oct. 28. 1999,p.46A;SteveCaulk, "OnlineMerchants
Need MoreEffectiveWebSites,"RockyMountainNews.Thurs-
day,March8. 2001 , p.5B.
