Web Is No Threat to Offline Sales

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It has been several years since early e-commerce Cassandras predicted that online retail sales would mean the slow death of bricks-and-mortar stores. Store managers whose companies were developing a Web presence feared they would lose revenue to online channels. But rather than competing against offline sales, the Internet helped make them even more robust.

A Jupiter Research study found that 43 percent of Internet users bought products from a retailer's offline store after viewing them on the seller's Web site. The study said that for every $1 spent online, consumers are influenced to spend another $6 offline.

Though online sales account for 2 percent to 3 percent of the total retail picture, the Web's importance as a builder of brand awareness and a driving factor in offline buying decisions shouldn't be underestimated.

Consider Internet search. It has made consumers better informed than those of any previous generation. With a few clicks, they can learn everything they could want to know about a product as well as where to buy it and how much they can expect to pay.

Smart shoppers have gotten into the habit of using the Internet for research before buying big-ticket items such as cars or appliances. One-third of consumers who make such purchases in offline outlets are checking online first, research shows.

But those well-prepared buyers still want to visit a store to experience the look and feel of certain types of merchandise - such as clothes, furniture and audiovisual equipment - and have the comfort of dealing one-on-one with another human as part of the transaction.

Integration of online and offline channels is the order of the day. Big-box retailers like Sears, Roebuck and Co. and Circuit City say that nearly half of their online customers select the "buy online, pick up in store" option, an opportunity for offline outlets to generate additional sales. Outdoor gear seller REI reports that 33 percent of its customers who chose that option made additional purchases while they were in the store.

Conversely, using in-store materials to promote a store's Web site can make a retailer's brand a daily presence in the customer's home. Williams-Sonoma has even used its Web site as a research tool when deciding where to build new stores, targeting ZIP codes where high volumes of online traffic originated.

Though some categories of merchants have taken big hits from online outlets and their seemingly limitless inventories, such as book and record stores, for most retailers the Internet is serving as a gateway to legions of new buyers.

Retailers who use multiple channels note that as many as 40 percent of their online customers are new to their companies. Part of the challenge merchants face is finding out who these shoppers are and learning what they want.

Retailing via the Internet isn't about creating a new market. It is about tapping a vast pool of consumers who already are there searching for your product. If you don't make it easy for them to find you, your competitors will capture them.

But there's good news: The information that retailers need to put a face on all of those clicks and dollars is built into the tool these new customers are using to find them.

For example, Internet search engines are the method of choice for 73 percent of online consumers when they want to find new Web sites. Each month, 110 million users conduct nearly 4 billion searches, providing a sure barometer of their interests and needs.

With a targeted search marketing campaign that uses well-selected keywords, you can catch them where they live at the exact moment they're looking to buy, at a lower cost than e-mail or banner ads.

There are many ways to increase your probability of in-store sales success. Prices should be consistent between online and offline outlets. Sites should be designed in a way that makes crucial pages such as store locators and product information accessible within a few clicks from the home page. Landing pages for keyword-specific links should relate to the words as directly as possible. No one wants to click on a link for a specific product only to be directed to a generic page. Natural optimization can bolster product descriptions - eliminating print-ad fluff - to get more pages listed on major search engines.

Some retailers remain reluctant to invest their precious media dollars in paid search or search engine optimization because they think the effectiveness of those tools is unproven.

Given that Internet users spend as much time online as they do watching TV, it seems odd that online advertising accounts for only about $5 million in media spending a week compared with $50 million spent on TV. But numerous ways exist to ask customers "how'd you hear about this?" and to quantify ROI: online or in-store surveys; online coupons that can be printed out and taken to the store for redemption; and rebates or gifts that are redeemable only on the Web.

As the number of success stories grows, retailers who hesitate to cash in on the sales-building potential of Internet search will be left in the dust.


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