I’d like to first take a moment to thank Mr.Frank Sandtner for contributing such a well thought out article to the blog. Frank has been a great source of advice and consulting for me over the last 2 years. And he helps many in the industry navigate the internet.
The Internet: A Marketing Channel, A Sales Channel, or More?
By : Frank Sandtner
Every retailer in the U.S. with at least a three year planning horizon is grappling with how to think about ,co-exist with and best leverage the internet. Is the internet a friend or an enemy to your business? Are your existing customers starting to buy the products you sell on the internet or is it the big box stores that are losing their customers to ecommerce sales?
The internet and ecommerce have seen tremendous growth over the last ten years by every measurement. In 2011, it is estimated that 11% of appliance sales and 18% of electronics sales dollars will be completed on the internet. With those kinds of numbers, every retailer large and small needs a plan and Nationwide Marketing Group has the expertise and member services to support that plan. What I would like to do is give you some thoughts and insights that can help you develop your plan.
Internet as a Marketing Channel
Manufacturers and vendors have all fully embraced the internet as an efficient way to enable product research so consumers can find out about new products. These companies have been spending money on product demonstration modules and online video. The more forward thinking vendors are working hard to make their product demonstrations and online video accessible on as many websites and social media sites as possible. As vendors lean into the strength of the internet as a marketing channel, you should do the same.
Internet as a Sales Channel
Over the past six months, as the reported 2010 ecommerce growth numbers eclipsed the 9% forecast by reaching 11%, vendors have recognized the need to support ecommerce initiatives. They have learned that if a customer is ready to buy when on the internet (and prefers an online experience), do not block that path or you will likely lose a sale. You will notice that when on a product detail page on the Whirlpool website, there is now a “where to buy” link right below the product image. Whirlpool is enabling a well accepted consumer behavior from their website – presenting online sellers so the internet becomes a sales channel for appliances. As a Whirlpool retailer doing ecommerce, you have an opportunity to be presented on the “where to buy” results page.
To further recognize the importance of the internet in both marketing and selling appliances, two of our largest vendors – Whirlpool and Electrolux – have modified and released new coop policies with more detail and more opportunity to claim dollars spent on the internet. I suggest you spend some time reviewing those new policies.
Internet as Multiple Marketing and Sales Channels
For those most focused on the internet, it is a lot more than just a marketing and sales channel. What is their perspective?
- Consumer’s research and shopping will cross multiple online and offline media; their goal is for each channel to support the others
- Lead generation to a retailer’s website involves multiple online marketing channels
- Sales on the internet are not limited to a retailer’s own website
- Fulfillment for sales completed on the internet will not necessarily ship from the retailer’s store
- Cross Channel Research
When a consumer is researching a major purchase, she / he has access to more product information today than ever before. Product research most often begins with a web search. Search results are organized in such a way that the consumer is presented with a diverse range of search results including manufacturers websites, ecommerce sites, comparison shopping sites, along with news, video, and retailer websites. Overall, market research shows that consumers use the following sources of information for product research:
Online :
- Search
- Retailer websites
- Manufacturer websites
- Co-branded websites
- Shopping sites and blogs
Offline :
- Retail store
- Consumer
- Magazines
- Others’ homes
- other media
Because consumers use multiple channels and may in fact be using a few of them at the same time (ie. using a comparison shopping engine while on a retailer’s website), retailers need to keep a clear and consistent message across channels.
- Website Traffic Generation
Getting more and more traffic to your website is a key to internet success. Your website itself will generate some traffic if it is indexed properly by the search engines. Your website should show up high in the search results for consumers either looking for you by name or by product in your local market. But, the best internet marketers use additional ways to build traffic. Some of those are free and some are not.
Free options to build web traffic include local web directories, search directories, manufacturer store locators, and of course brandsdirect.com. The most common paid ways to build additional web traffic include search engine marketing, email marketing, and banner advertising. The good news is that all three are generally eligible for co-op. For Nationwide dealers, email marketing using the Bronto software is free. Vendors are providing co-op for these channels because they understand the value of these important tools.
- Online Selling
Most retailers have spent some time thinking about the implications of doing ecommerce on their website. Fewer have considered other online sales vehicles that involve transactions occurring outside of their website. Amazon and Ebay offer several business models whereby the transaction is completed off of the retailer’s website. More recently, there has been interest in Facebook serving as an estore for companies with Facebook Pages. Again, the most advanced internet players are not limiting themselves to their own website.
- Order Fulfillment
Finally, order fulfillment can get very complicated for retailers with a big internet presence. Rather than limiting themselves to their own inventory, they are building interfaces with distributors and warehouses that can efficiently deliver an order. This quickly expands both reach and depth of products that can be offered. Because the retailer has no holding cost for products they do not own, imagine the efficiencies involved with this type of sale.
The internet is becoming more and more complex and the number of paths that a retailer can take is increasing. Successful etailers are continually pushing for more online marketing channels that will outperform the ones they are using. They are also looking for more ways to transact beyond their store and their website. Within this context, each Nationwide retailer needs to set its own course. Make that course leverage the power of digital media to its fullestand be sure to discover the depth of digital services that Nationwide offers to help you.
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