-By Marshall Marcovitz

"Location, location, location." Those are the three magic words in real estate and also in bricks-and-mortar retailing. But today, we are in a wireless age and things are changing. Microsoft and Google have recently introduced new software that lets you shop from a wireless device like one of the new "smart phones." Yes, technology has poked its nose into retailing again. Just when you thought it was safe to go in the water and refine your e-commerce skills, technology is changing the game again. Admittedly, online sales are still only a small sliver of the multi-trillion-dollar retail pie, but the more convenient you make it for your customer to buy from you, the more loyal a customer you will retain. So keep your eyes and ears open and be aware of developments in the wireless world of retailing.

You know how the peak 2007 holiday selling season played out, but I don't because I'm writing this column just before the Thanksgiving holidays. The fourth-quarter sales forecasts were for a soft season. I hope you all hit your forecasts and, even better, exceeded them.

Reinventing Sales Promotion Offers
The offer to buyers and prospects of yesterday is not necessarily the offer of tomorrow. I've learned that reinventing how you use a tested offer can bring profitable results down to the bottom line. New competition is coming from direct mail and the Internet. New technology plays a role in the enhancements being offered in the marketplace, and it has made customers savvier about prices and selection.

Where do you begin this reinvention process? I've been giving this idea a lot of thought and suggest you familiarize yourself with three brilliant thinkers:
Mark J. Penn, CEO, Burson-Marstelller PR firm. He's a polling analyst and has written a book titled Microtrends that explains how to find and motivate niche groups. He does not focus on mega trends but rather "smaller currents and discreet demographics that are creating social niches and driving a variety of patterns in social change."

Alvin Toffler invented the role of the futurist. He focuses on defining trends, and his seminal book - Future Shock - is still a classic.

Malcolm Gladwell, the author of Blink, which discusses the power of thinking without thinking, and The Tipping Point, which engages the reader with the idea of how little things can make a big difference. Why does change happen? How do trends work? His provocative ideas are taking the business world by storm.

How can you reinvent one promotional tool you already have in your tool box? Nothing says BUY like "FREE SHIPPING." I noticed that Christmas trees started appearing as early as October this year. Some retailers started a free shipping promotion in September. What can we learn from this small business current? The first thing I noticed was that the free shipping offer that attracted my attention came with no minimum purchase. I did a little research and discovered that strings-attached shipping offers were used by more than 80 percent of online merchants last year. I wondered what the exact meaning of "free" meant. I also discovered that customers typically order more frequently from sites where they don't have to pay shipping charges, but the average order size drops. We all know that shipping costs diminish the profit margin of each sale. So why do it? The promotion is essentially a way to attract new customers, both gift-givers and those who receive gifts, who may later order more products from the company.

The key question is how can you be smarter about free shipping? It definitely gets a response, but those customers may have bought anyway, even without the offer. Ask yourself the question, "How much more in sales do I need to justify the cost of an unconditional free shipping promotion?" If you are still building your buyer base, then the increase in new customers justifies the cost of the promotion. It's more expensive to acquire a new buyer than to retain a current customer. For others, conditional (excluding heavy items, a minimum order size like $99) free shipping is a much safer middle ground, since it guarantees customers will order a minimum amount of items and thereby help the company recoup more of the shipping costs.

Amazon continues to offer free shipping on orders of $25 or more. I suspect they would not continue to run this offer unless it was effective. I also noticed some retailers were offering a flat rate on shipping charges. It appeared to be offered mostly by apparel retailers like Old Navy. I also saw on overstock.com that they offered a $2.95 shipping fee on all sales but the fee dropped to $1 from time to time. I suspect this promotion technique caused their average order to go up significantly.

What can you offer? I suggest you consider more free or discounted shipping promotions during the holiday season (the fourth quarter is the best, but consider other holiday periods during the year as a test using various offers with different groups). The most cost-effective test is via e-mail, and then broadly offer those promotions that performed well.

My experience has been that consumers generally respond to shipping promotions more avidly than discounts. This is not necessarily an irrational behavior. In a world of complicated shipping offers, there's a cost to figuring out what the actual shipping fee is. It might be rational to consider free shipping. You could possibly profit from reinventing your execution of free shipping promotions. You could be reinventing the way you sell on the Web.

Marshall's Marketing Resources
1. www.the-dma.org - Trade association for users, suppliers in direct, database and interactive marketing.
2. www.gmarketing.com - Online magazine for small businesses and entrepreneurs.
3. www.marketingprofs.com - Marketing concepts and strategies.
4. www.marketingpower.com - American Marketing Association's education site for marketing executives.
5. www.shop.org - Retail industry group.
6. www.forrester.com - Independent technology and market research company.

Marshall's Top Book Recommendation
Good to Great by Jim Collins is a must-read for anyone running a business. Jim is a management consultant and motivational speaker who is a former faculty member at the Stanford University Graduate School of Business. He breaks down the process of how you can meet the challenge of long-term sustained performance. What are the characteristics that cause a company to go from good to great? What are the standards? What benchmarks need to be present? What was different about the companies? For example, why did Walgreens become a great company while Eckert Drug was merely good? Why did Walgreens take the leap? It's all about leadership and assembling the "right" team. Why do some companies succeed and others fail?

Marshall Marcovitz is the founder and former CEO of the CHEF'S CATALOG, a leading Internet shopping site. Currently, he is a lecturer, a university professor and a marketing consultant. He may be contacted at mmmellow9@yahoo.com.