Online Retailers Discover Direct Marketing

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CDNow, Reel.com, planetRX.com and other online retailers involved with ShopperConnection, a 1-year-old e-retailing network, are beginning to realize that marketing isn't just about branding - direct marketing is helpful as well.


The 13 top e-commerce sites on shopperconnection.com put together their first direct mail piece for this holiday season. Through the end of the year, each participating retailer is sending out 16-page coupon booklets to consumers who purchase at their sites. The coupons offer values such as $10 off from CDNow, free shipping from Cooking.com and 15 percent off the consumer's next purchase from Fogdog.com.


"In the past it was too much of a stretch to have a direct marketing piece to drive you to do something on the Internet," said Michelle Rubin, director of affiliate marketing for CDNow, Fort Washington, PA. "Now people are becoming more accustomed to the ways of the Internet. The timing is better for a piece like this."


These leading e-commerce sites are using traditional marketing to their advantage, while their competitors struggle to build their brand names. "What you're finding are pretty aggressive retailers - aggressive direct marketers that are putting a lot of energy, effort and budget into campaigns that promote response instead of brand," said Marissa Gluck, an analyst for Jupiter Communications, New York. "There needs to be a mix of media and marketing goals. In that respect they have an insight that some of their competitors don't have because their [competitors are] so focused on building a brand."


The retailers are supporting the coupon campaign online. When consumers make a purchase online and receive their order confirmations, they are presented with the coupon offers via e-mail. Banners also advertise the discounts.


The coupon book has been a "phenomenal success," according to Rubin, although she would not reveal conversion rates.


This comes as no surprise to David Alschuler, vice president of e-business for the Aberdeen Group, an IT consulting and research group in Boston. "Traditional customer incentives and rebates are available tools. Traditional marketing hasn't disappeared. The issue was just learning how to use these marketing options to make the virtual channel work," he said


ShopperConnection was brought together by CDNow to provide a one-stop shopping option. Members pay dues for site maintenance and promotions.


True to the more traditional model of marketing, other types of advertising will follow, according to Rubin. "We're going to crawl, walk and then run. This is how everything should be done on the Net," she said. "The holiday coupon book was a great idea since this is the first time we did a promotion for the site. We wanted to see how it would work and we weren't ready to blow something out on TV and radio. Direct marketing is a lot cheaper than TV."


Next year, there are plans to expand the direct marketing campaign. "We will become more sophisticated and test different offers," Rubin said.
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