| Direct and Online Marketing: Building Direct Customer Relationships 509

Chapter 17 | Direct and Online Marketing: Building Direct Customer Relationships 509

a month surfing the Web. Worldwide, more than 1.8 billion people now have Internet ac- cess. 30 Moreover, a recent survey found that the Internet has surpassed TV as the medium perceived as most essential in people’s lives. When presented with a choice of removing the Internet or television from their lives, 49 percent of respondents chose to drop television, whereas 48 percent chose the Internet. “When we first asked . . . in 2001, the spread was

72 percent for eliminating Internet and 26 percent for eliminating television,” says a re- searcher. “The shift over these nine years has been steady and profound.” 31

Click-only companies

All kinds of companies now market online. Click-only companies operate on the In-

The so-called dot-coms, which operate ternet only. They include a wide array of firms, from e-tailers such as Amazon.com and online only and have no brick-and-mortar

Expedia.com that sell products and services directly to final buyers via the Internet to search market presence.

engines and portals (such as Yahoo!, Google, and MSN), transaction sites (eBay, Craigslist), and content sites (the New York Times on the Web, ESPN.com, and Encyclopædia Britannica). Many

Click-and-mortar companies

click-only dot-coms are now prospering in today’s online marketplace. Traditional brick-and-mortar companies

The success of the dot-coms has caused existing brick-and-mortar manufacturers and that have added online marketing to their

retailers to reexamine how they serve their markets. Now, almost all of these traditional operations.

companies have created their own online sales and communications channels, becoming click-and-mortar companies . It’s hard to find a company today that doesn’t have a substantial Web presence.

In fact, many click-and-mortar companies are now having more online success than their click-only competitors. A recent ranking of the world’s 10 largest online retail sites contained only one click-only retailer (Amazon.com, which was ranked number

one). All the others were multichannel retailers. 32 For example, number two on the list is Staples, the $24 billion office supply retailer. Staples operates more than 2,240 su- perstores worldwide. But you might be surprised to learn that more than half of Staples’ North American sales and profits come from its online and direct marketing operations. In fact, whereas Staples’ brick-and-mortar store sales in North America have been flat or declining over the past two years, online and direct sales have soared 46 percent. 33

Selling on the Web lets Staples build deeper, more personalized relationships with customers large and small. A large customer, such as GE or P&G, can create lists of approved office products at discount prices and then let company departments or even individuals do their own online purchasing. This reduces ordering costs, cuts through the red tape, and speeds up the ordering process for customers. At the same time, it encourages companies to use Staples as a sole source for office supplies. Even the smallest companies find 24-hour-a-day online ordering easier and more efficient. In addition, Staples’ Web operations complement store sales. The Staples.com site builds store traffic by helping customers find a local store and check stock and prices. In return, the local store promotes the Web site through in-store kiosks. If customers don’t find what they need on the shelves, they can quickly order it via the kiosk. Thus, Staples backs its “that was easy” po-

Click-and-mortar marketing: Staples backs its "that was easy" positioning by

sitioning by offering a full range of contact points and delivery modes—online,

offering a full range of contact points and

catalogs, phone or fax, and in the store. No click-only or brick-only seller can

delivery modes.

match that kind of call, click, or visit convenience and support.