Unifying Forces Shift the Retail Market

SAN MATEO (08/14/2000) - Since the emergence of e-commerce, companies have struggled to implement a successful online sales and marketing strategy. But even as they come to terms with the problems that this brings, those on the leading edge are moving to the next level: developing integrated strategies that leverage the strengths of real-world and virtual channels to the benefit of the other.

As our Page One story by Ephraim Schwartz shows, this trend is both an opportunity and a threat. On the downside, General Motors Corp. so far has been unable to build a particular dealership where it wanted to; on the upside, Target is enhancing its appeal to customers by offering Etrade's services -- previously available only in the virtual world -- to shoppers in its brick-and-mortar stores.

Ignoring the logistical problems of developing an integrated strategy, it's easy to see how the virtual world can benefit brick-and-mortar customers and vice versa. For example, an Internet shopper could select items online that he or she is interested in and have them at the physical store, waiting to be looked over. Or someone in a physical store could go online to find out when the next shipment of an out-of-stock item is due. Order fulfillment problems that have plagued dot-coms would go away if customers collected orders themselves.

The main problem that brick-and-mortar companies must address is how to unify their channels. Many companies have developed online strategies in a vacuum totally separate from real-world operations, sometimes creating autonomous subsidiaries. Conversely, pure-play dot-coms must develop a presence in the real world.

For just these reasons, the first wave of integration is taking the form of alliances between dot-coms and brick-and-mortar companies, as our stories by Bob Trott and Ephraim Schwartz on page 31 show.

But in the ruthless world of business, this can at best be a short-term fix, and ultimately these companies must figure out a way of going it alone.

How integrated is your strategy?

Write to me at matthew_woollacott@infoworld.com.

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