As early as this holiday season, DotJunction plans to open the first of many retail stores in a shopping mall in Boston.
However, consumers who visit this store, as well as up to 500 other stores the company plans to open, will not find racks of clothes or shelves full of merchandise. Instead, they will find a series of computer screens where consumers can make purchases from, or learn more about, select Web sites.
The goal of the stores is to bring all the advantages of a physical store to an e-commerce vendor, said Paul Vallely, founder of DotJunction, Cumberland, RI. These advantages include a place where consumers can return and exchange merchandise as well as speak with a salesperson who can walk them through the buying experience.
“We want to alleviate the concerns and barriers for e-commerce companies,” he said. “This will be the first place in the physical world where consumers can come and learn how to make the Internet the best experience.”
At least one company has already tried and failed using a similar model. @ the mall launched manned kiosks early this year. However, it is no longer in business, said Andy Bailen, the company's former CEO. “I'm out of that business,” he said. He would not specify what went wrong.
The idea behind @ the mall was that the kiosks, divided into four sections to accommodate four advertisers, would stand in the corridors of shopping plazas. @ the mall expected to be in 660 malls by the end of 2004.
The concept of bringing the Internet to malls does not make sense to many direct marketers. The reason: The Internet is a direct selling medium, and people who don't like to shop direct go to stores to make their purchases.
A recent Direct Marketing Association study found that 40 percent of people surveyed had not purchased direct using the Web, the phone or the mail in the previous 12 months.
Since they went to the mall to make an in-person purchase in the first place, it may be difficult for DotJunction to turn mall shoppers into remote buyers, said Roy Schwedelson, CEO of Worldata/WebConnect, a direct marketing list firm and online ad services company in Boca Raton, FL.
And even when DotJunction reaches consumers who like to buy direct, “they probably decided to go to the mall because they wanted to be touchy-feely,” Schwedelson said. “If I get in my car to go to the mall, I don't want to sit on the computer. I have a great one at home.”
Chris Peterson, CEO of FusionDM, San Francisco, agreed. “It's the same as putting a rack of catalogs in the mall. Going after catalog shoppers in a mall sounds a little odd,” he said. “In the end, there are probably better ways to get in front of people.”
Vallely said the stores provide another important marketing channel that Web sites need to reach consumers.
“We'll be in malls that have traffic of 10 [million] to 60 million people a year,” he said. “It adds a new channel. Web sites that have already reached consumers through television, radio … can now have an in-store channel.”
This is a strong selling point, according to Doug Berger, spokesman for the DMA, New York. “Multichannelism seems to be increasingly more popular,” he said. “Increasingly, what we're seeing as an industry is the more channels a company makes available to the consumer household or business, the better.”
DotJunction is waiting for final approval of its Boston pilot store. Vallely said it would take eight or nine weeks to open its doors once it gets the go-ahead. In addition to the six to 50 computer terminals where consumers can surf and buy, the stores will hand out incentive-filled kits on behalf of the vendors, including coupons and other offers. The company has not announced any clients.
Other companies that have launched related efforts include Gateway Inc. The computer manufacturer, which got its start on the Web, opened more than 290 Country stores last month. Borders Books and Music, Best Buy and others also have recently introduced in-store Internet kiosks.