Marketing.......................................................................................Stacey Austin Merritt

Discuss the issues involved in electronic retailing and advertising.

There are many things to consider when it comes to electronic marketing. One is the changes in attitudes of the consumer. Another is the barriers to retailing on the Internet. Internet marketers must also use creativity in considering new business approaches to entice the consumer and explore the possibilities the Internet provides. Internet retailers must consider Internet global domains. Companies must also consider legal issues of posting on bulletin boards and transmitting information over the Internet. Web enterprises must also be the first to set up Internet banking accounts for smartcard access and other security enhancement measures, once standards are adopted. Finally, companies must remember that marketing on the Internet cannot be like the traditional "shot-gun" approach of the past.

Consumers are moving away from "luxury" items towards less costly and more practical ones. Also, consumers are increasingly viewing shopping as a "job" rather than "entertainment." Merchants need to consider "Value marketing" and manufacturers need to provide "how to's" to allow consumers to help themselves, while adding value in the process. The Internet, the fastest growing worldwide communications resource, seems ready-made to interact with retailers who will be able to use it to increase their customer base, increase product differentiation, develop niche markets, provide added value to products and services, and meet customer demands for information. The Internet, which already provides a standard for information exchange and transcends normal communication media, will become more valuable to retailers once standards for smartcards and Internet banking are enacted. In addition, with communication between consumer, merchant, and the manufacturer established, the Internet is ready to usher in an era of "mass customization" tailoring the finished product to the needs of the individual consumer.

Barriers to retailing on the Internet, according to many researchers, include: there aren't enough shoppers, it isn't easy to find Internet shops, security is lax, it's hard to comparison shop, and it's not much fun. Many of these barriers will eliminate themselves given time. As more and more people join the Internet family, there will soon be, if there isn't already, enough shoppers. The smartcard will virtually eliminate security concerns. As search engines become more advanced it may be possible, for instance, to search for: a red 1991 Subaru 4-wheel-drive Legacy with more than 100,000 and less than 200,000 miles, and one owner for less than $5000 within 150 miles of Richmond, KY. Also, with the advent of Internet yellow pages it is getting easier to find businesses; and there are businesses ranging from fine cultured South Sea pearls to foreign language translation, from adopting Russian children to Yak 18 Warbird and Titan Tornado sales, from Australian music to Hummer sales, and from Adjustable Little Giant ladder Systems to BRAINSTICKERTMS. Internet stores are already adding sounds to their pages, probably soon they will be able to interlink lots of companies with the same types of products with an interactive game-like page. After all, even with comparison shopping available, all consumers would not come to the same conclusion as the best product for themselves. It also has been projected that by the year 2000, due to the level of competition found throughout and made available by the net, over half of stores now open will be gone. The variability in retailing being much greater than in other businesses is another barrier which will be invisible to the Internet. While there are many barriers to overcome, in the future, conventional retail will be unable to compete with the efficiency, cost and global nature of the Internet.

Creativity in exploring new approaches to business is presently one of Internet marketers most valuable tools in the race to entice new customers. Some creative examples of marketing on the Internet are: Terry Powell advertises his new retail management textbook and his resume, a call for papers for the Marketing and Public Policy 1996 Conference, and Boulder County's Business and FreeAdz Classifieds. If many potential textbook adopters were to do a little net sleuthing before choosing a textbook, Terry many find a unprecedented amount of orders for a new textbook. In the past calls for papers were limited mostly to already "known" people whom could be asked to consider submissions, besides the few who may see the requests for submissions on an obscure bulletin board somewhere. Boulder County will likely find others besides county residents investigating what they have to offer.

Electronic retailing with a little ingenuity can also cover such topics as database and backend marketing, fulfillment, and the role of advertising agencies and measurements for new media effectiveness, which are common support mechanisms for most of the new marketing ventures. It can also take advantage of new sales opportunities afforded by emerging electronic media including, commercial on-line services, the Internet, World Wide Web, interactive kiosks, CD-ROM and CD-i. Electronic retailers must also incorporate strategic planning functions into their normal routine. Imagine this example; during the process of buying a new car, one participates in an interactive interview with other on-line potential buyers and an informed manufacturer representative! Who has never wished they had some intelligent companionship along when shopping for a new car?!

Internet retailers must consider current and future distribution and growth of global Internet domains. Virtually every retailer will be, if not already, affected by global sourcing. Presently, about six percent of US households with a telephone have been found to be Internet users. Solid demographic data on Internet users and on-line subscribers is needed so companies will be able to compute best targets, which products to link to first, and perhaps even which are displayed or referenced to in homepages and mini-ads. Other reasons to include the Internet include exploring global opportunities as domestic markets become saturated, differences in attitudes and languages due to culture, the dramatic reduction in the number of retailers as a result of competition, technology, and globalization, strategic alliances, just-in-time delivery, supply chain management, total quality management, continuous quality improvement, relationship marketing, and partnering.

If bulletin boards are a part of the business, some plan about handling their contents must be in effect as, for example, people have already been investigated, and some jailed, for their postings to bulletin boards and, in some cases, the "owners" of the bulletin boards have been held liable. Furthermore, since many obscenity laws defer to "local community standards" to determine obscenity, problems with respect to the Internet, which knows no boundaries, are surfacing. Businesses should walk carefully through territories such as these, at least until groups such as the Electronic Frontier Foundation can secure legislation to keep the Internet in a state of near-complete freedom. Many technical and commercial problems are encountered through the use of the word "transmit," which means something vastly broader for computer networks than for other communications media, such as phone companies.

Internet businesses must be concerned with security issues to protect the consumer's privacy, and overcome the fear many have of doing business on the Internet. Potential, and existing, web enterprises must embrace Internet banking and smartcards, as another, and realistic, way to overcome sporadic fears and increase security, as soon as standards are adopted. Other measures that Internet businesses can investigate to increase security and reduce reservations include pre-registration, call-in, encryption, and certification. Consumers seem to prefer measures that include toll-free phone or fax and third party involvement. To further gain the consumer's trust, sellers must address the issues of authenticity, post-sales assurance, and customer service. A secure server isn't much help when a customer is not happy with his/her order and cannot reach a warm body to do something about it. While the Internet may not usurp standard retail, the interactive nature of the Internet is conducive to building closer customer relationships.

Internet markets must not fall into the frame of mind that traditional "shot-gun" advertising is "acceptable" on the Internet. The Internet is a place of individuality, but where one can participate interactively with others when/if desired. Marketers must preserve this atmosphere, if only for themselves. Markets must make their information readily available should a consumer inquire though they may, if in a user-friendly non- obtrusive fashion, put links to their information where the customer may stumble upon them. If markets were to fall back to "shot-gunning" and in so doing randomly, or even with some order, email customers, or have their web sites automatically opened with certain keywords, they would put themselves out of business for, if it doesn't exist already, within days there would be software available for free download from the web wherein the consumer could set up to automatically reject notices from that and any other particular entity. Within a matter of weeks, or only days, no one would have ever heard of that company, and consumers would not be able to receive information from that company, even if they requested it, unless - of course - they removed the company from their "reject" lists.


Advertising, Marketing and Electronic Commerce On The Internet

Todd Barrett, Who's Minding the Store?, Business School Magazine, Stanford Graduate School of Business

Computer underground Digest; volume 5, issue 86, 11/14/93

Electronic Retailing

Marketing Resources

Ronald W. Hasty, Home Page

Ronald W. Hasty, Retail Management Textbook

Terry Powell, Retailing and Electronic Commerce

Terry Powell, Terry Powell's Personal Web Page

Regulating "Indecency" on the Internet, dot.COM

Research Opportunities