We all knew that the 1990s tech boom would change the world. But then a funny thing happened: Retail brick-and-mortar companies gleefully co-existed with their e-commerce rivals. Some retailers even jumped aggressively into the new world of e-commerce and developed robust websites. Some simply hung around the edges of the new cyberworld and developed basic information content sites that let their Internet customers know who they were and what they sold. Everyone seemed to ask themselves the question: Has business really changed? Customers still wanted quality and service. Branding was still important to customers. Advertising and sales promotion still were important ingredients in the marketing mix — newspaper advertising, direct mail, radio and even TV if the budget allowed. Retailers still had to deliver. Minimize out-of-stock situations. Build inventory levels for the Christmas holiday shopping season. Technology had to be implemented correctly. Inventory management and control systems needed to be up-to-date, merchandising systems had to accurately forecast product demand figures. There was still a need to integrate online with back office systems. Business managers still practiced fundamentals and operated using sound business principles.
Then businesses started being more focused on being successful with technology. There were certain elements of "e-success" that were emerging:
- Getting closer to the customer.
- Delivering useful, relevant and timely accurate content.
- The need for speed.
- Understanding limitations.
- Aligning the e-business with the core process and integrating technology.
The retailers who combined common-sense marketing with first-hand familiarity of the Internet and good insight into what their prospects, customers, partners, and suppliers wanted were best prepared to make the most of the existing business opportunities. Building the business plan, organizing the plan, identifying the problems that needed solving, and designing the revenue model were the most important elements in growing the business. There was more of an emphasis on strategic partnership. Looking beyond the obvious, it was turning competitors into partners and building content and community in online and offline ventures. Managing the project was key. Who was in charge? What do you do first? How much do you spend? How long will it take? There was a premium on thinking strategically.
Where do cyber stores and bricks stores stand today?
The U.S. Postal Service says it will be insolvent by the end of 2011 without a bailout. Blockbuster and Borders have filed for bankruptcy. E-mails and texting have reduced mail volumes faster than postage fees can rise. The neighborhood video rental store is on its last legs because guess what, streaming video from Netflix and others is rampaging into America's living room. Netflix vs. Blockbuster was no contest. Blockbuster opened 4,000 stores in two decades. Netflix sales were up 43,101 percent from 1999. That's not a mistake, sales were up 43,101 percent and Blockbuster filed for bankruptcy in 2010. And music stores keep closing. iTunes made its debut in 2003 with devastating effects on music retailers. Tower Records went out of business in 2004, and Musicland folded in 2006. Songs sold on iTunes: up 1,169,900 percent from 2003. The trend is clear. The big question is what will be the next industry to be changed by the growth of cyber shopping? How do you fight back? What's the best strategy to take? Barnes & Noble is fighting back against Amazon with its Nook e-reader. Amazon got a jump on the book industry with its Kindle and has captured a large share of the market. Who are its competitors? The Nook and the Apple iPad e-readers with more competition coming. Where does that leave the bricks retail bookseller? Time will tell.
How do you reinvent yourself?
I've given some thought to creating a list of rules for reinventions.
- Prioritize your passions. The best thing about reinventing yourself is that you are free to get rid of all those things you hate. Take a good hard look at your passions and skill sets, and hope they can get you to a new place.
- Learn by doing. Forget about being perfect before trying out a new website approach. The beauty of cyberspace is that there's often no right answer, so you won't be making a mistake. You are free to test different formats and measure which is the most effective for your audience.
- Really get online. Digital is the name of the reinvention game. Yes, you can learn social media, and it's really not that difficult. In fact, technology has become more accessible. So do it!
- Start from scratch. We're all living in an age of rapid change. Don't be intimidated! Jump right in. Let's face it, you really don't have much of a choice.
- Share your wealth. In the past we used to acquire information and keep it to ourselves. Times have changed, today information is practically a commodity. Sharing information connects you to others and positions you as a better brand.
Who would lead your executive dream team?
Who would you want as your "dream team" CEO? Someone with the vision, the business success track record and the ability to grow a business profitability. Here are my top three choices: Steve Jobs, Apple; James Skinner, McDonalds; and Sam Palmisano, IBM.
Have I convinced you?
Many of you gourmet retailers do not have a website. Online selling has been judged as too expensive to create, unnecessary for your customers, or just too much trouble in terms of the resources you have at your disposal. Whether you're a kitchenware retailer or are selling specialty food products, you are aware of the threat that online retailing poses to your business. There is big competition facing you online from Amazon selling kitchenware to pricing and information websites that encourage comparison shopping. What benefits can you reap when you go online? Here are a few:
- Build customer loyalty. Give customers and prospects 24/7/365 access.
- Share product information with no boundaries. Position your store as the source of knowledge.
- Cross-selling opportunities. Convenient environment to sell that non-stick fry pan and the hot handle holder, and the plastic spatula.
- Customer acquisition. Dip into that bottomless pool of prospects. Use key words to allow your site to be listed on search engines and directories.
- Predictions for inventory management and stock replenishment. Tie in your inventory management and control system with your website to achieve more efficient inventory control. No buyer wants to see the dreaded "out of stock" flag on their order.
- Customer knowledge. The more information about how to cook with that 5-quart sauté pan, the better. Include usage tips and favorite recipes that have been cook tested.
How much money is enough to build a website?
First step, build a budget. How robust a site is necessary? Start small, make your mistakes, learn your lessons and build from there. Think about the following: site development, company infrastructure, marketing, fulfillment, customer service and the "black hole."
Next create a site development plan that includes project planning and administration. Key areas include:
- Design and create a database
- Technical design
- Graphic design
- Software
- Site production
- Quality control
- Hardware
I suspect most of my audience are entrepreneurs. I'm one of you. I pared down my grand vision of marketing on the Web and used the Web for real business. The business of connecting with my customers and new prospects. The speed of Internet growth has produced a huge cultural shift toward entrepreneurship. Great numbers of people have begun turning to small business as a vehicle to realize their hopes and dreams. You can be one of these people and see what you can accomplish in growing your business. Remember the neighborhood music store, movie rental store, and the local book store.
Marshall Marcovitz is the founder and former CEO of Chefs Catalog, a leading Internet shopping site. Currently, he is a lecturer, university professor and marketing consultant. He may be contacted at mmmellow9@yahoo.com.
