PRINCETON, NJ – Apparently “Stick to your knitting” didn’t make Merrill Lynch & Co.’s list of top business philosophies for thriving in the Internet age.
In a drastic move from its core finance bailiwick, Merrill has quietly launched three Web sites this month: shopmerrill.com, merrillebusiness.com and merrillauctions.com. While the sites seek business from online consumers, they are primarily aimed at Merrill’s clients – 8 million accounts serving 4.5 million client households – for whom it manages $1.4 trillion in assets.
“Our objective, in terms of everything we’re doing in e-commerce, is really to position Merrill Lynch as a commerce hub for our clients,” said Randal C. Langdon, first vice president-senior director of digital business development and new media.
But fierce competition from early movers, seemingly limitless shopping options for consumers and an entirely different business may make it a tough transition, said Alan Alper, senior analyst at Gomez Advisors, Lincoln, MA.
“They’re out of their comfort zone,” Alper said. “They’re not used to marketing other than equities, IPOs, securities – quite odorless, colorless products. [Now] you’re talking of products that have a lot of pizazz. This is much more demand creation than demand fulfillment.”
Still, research by the financial services giant shows that 25 percent of Merrill’s clients buy online, leading company officials to think there is a wide-open opportunity to leverage its brand into becoming the e-retailer of choice for busy, upscale consumers.
“Our e-commerce value proposition is also about lifestyle management,” said Jyoti Chopra, Merrill’s director of emedia communications and digital business development. “As there’s increased usage of the Internet by our clients, we’re looking to facilitate their lifestyle needs. So, it’s one-stop shopping for their total financial needs as well as lifestyle needs.”
Of the three sites, ShopMerrill will target consumers with 4 million products from 400 partner retailers, including eToys.com, Reel.com, barnesandnoble.com, PC Flowers & Gifts, BabyCenter.com, bedandbath.com, FragranceNet, eJeweler, AutoAccessory.com and cooking.com.
Merrillebusiness will include directory services, business gifts, printing services, office supplies, travel, flowers, cards and other business-related offerings. Partners include Macys.com, Works.com, Network Solutions, BravoGifts.com, Integra InfoMall, iShip.com, iPrint.com and expresscopy.com.
Merrillauctions aims to further strengthen the company’s relationships with its clients by holding special auctions just for them. Every seven days it will invite clients to bid for products using points they’ve earned – online or offline – using their co-branded Visa credit cards. For instance, a pair of Tag Heuer watches opened at 50,000 points, a 12-bottle case of 1990 Louis Roederer Cristal Champagne at 75,000 points, and two first-class domestic round-trip airline tickets began at 100,000 points. Also, it will reward clients who use its co-branded Visa credit card to shop at the sites with triple bonus points on purchases.
Merrill has partnered with uBid.com for consumer auctions of antiques, collectibles and the like. TradeOut.com is the partner for business auctions, which could include liquidation of excess or discontinued inventory and products, from power generators to paper items.
Orders placed on all Merrill sites will be fulfilled and shipped by the respective retailers. Merrill gets a commission on every sale made.
To launch the sites Merrill is first targeting its large employee base and 15,000-strong band of financial consultants. Among the planned tactics are educational modules built into the training program for financial consultants, eFlash e-mail newsletters, road shows, a Merrill-only national sales Web site and coverage on the employee Worldnet intranet, vice chairman John L. Steffans’ e-mail and DBS broadcast to staff, blast faxes and payroll inserts.
“By marketing products internally, they’re putting their toe in the water to see what works,” Alper said. “The question I have is whether their clients are going to be interested.”
Indeed, Merrill’s financial consultants, in turn, will promote the sites to clients through direct contact, promotional campaigns and in telephone conversations. Later this fall, the company will roll out a direct mail campaign aimed at clients. Other tactics include participation at trade shows and industry events with speaking engagements, online banners, inserts in promotional mail and financial statements, and handouts in the 800 Merrill branches in the United States. Clients who sign up for Merrill’s Bullhorn service also will receive e-mails about the offerings. Such efforts will be complemented by ongoing PR and a bimonthly syndicated eSense column for media on Net trends and tips.
“Our challenge is to take our client base as it exists right now and empower that as an online community,” Langdon said. “And that is what we’re really focused on and trying to extend the value-add to our relationship.”
This fall, Merrill will break an ad campaign from longtime agency J. Walter Thompson Co., New York, that includes the new offerings as part of the company’s repositioning. Such moves are a precursor to the biggest change of all: Merrill’s Dec. 1 launch of discounted online trading at $29.95 per trade.
“The challenge is getting the Internet community to understand the depth and nature of our services because it’s so vast,” said Joshua Nabozny, vice president and director of e-commerce at Merrill, “and to get that message out so that the Internet community perceives it as comprehensive an offering it is.”
