Online Gets Real - online companies such as Prio help retailers garner customers

Brandweek, Nov 8, 1999 by Steven Vonder Haar

Vicinity offers a complete Yellow Pages-style directory that incorporates listings to virtually all active businesses related to a specific product category. However, marketers that pay can have their names pushed to the top of the list in relevant product categories. In addition to McDonald's and Starbucks, companies including Nike, Reebok, Levi Strauss & Co. and the Marriott and Hilton hotel chains all are paying for prime placement on the new wireless Vicinity system.

"The big change this brings is that you don't have to make a brand decision before you buy a product," says Eric Winkler, vice president of marketing for Vicinity. "Now, we're grabbing consumers before they make that decision and drive them to the Vicinity partner brand."

Winkler adds, "We did see that historic division between the worlds of electronic commerce and traditional retail, but in the past year, we've seen the brick wall between the two start to come down."

Indeed, in many cases, says Forrester's Williams, a retailer can create an even tighter bond with shoppers by selling them something online and having that experience carry over into the real world. "Once consumers make purchases in an online storefront, they tend to spend more in that company's real storefront as well," Williams says.

Another factor fueling tighter ties is the emergence of richer consumer-profiling and targeting services from the likes of Personify and CMGI's Engage Technologies' unit, which have helped fuel new ways of finding Web surfers likely to respond to Web marketing manufacturers.

For instance, maybe a company finds the most success selling to families making $75,000 to $80,000 a year who live in the western U.S. and have at least two children in school. With profiling, companies can make a concerted effort to identify and deliver their marketing message specifically to those families.

"People are beginning to wake up and realize that the Web is driving traffic to other fulfillment channels," says Personify CEO Eileen Gittins. "Retailers understand that marketing online can be tied to marketing in the store."

Automobile manufacturer Volvo, for instance, serves ads to specific audience segments online that match the characteristics of the typical Volvo buyers, says Kris Narayanan, database marketing manager for the car maker. "The key is identifying people in various phases of the shopping process," Narayanan explains, "and that's something that's easier to do on the Web than it is in the real world."

Any prospective buyers Volvo generates online immediately turn into leads that are handed over to the company's nationwide network of car dealers as the targeted shoppers get closer to making a decision. "The nature of the beast is that the business is driven through our retailers," Narayanan says. "The goal is to drive the consumer as far down the funnel as we can to the retailer."

If the retailer can't pull real live shoppers from the Web, one alternative is to at least pull real-time shopping data that can enhance the in-store experience, adds Gittins of Personify. If a toy retailer, for instance, notices an uptick in demand for selected products online, that information can be used to tinker with in-store merchandising. Essentially, hot sellers online can prompt a merchant to move swiftly to promote those product lines in their stores on a more timely basis.