As noted earlier, online marketing is the fastest-growing form of direct marketing. Widespread use of the Internet is having a dramatic impact on both buyers and the marketers who serve them. In this section, we examine how marketing strategy and practice are changing to take advantage of today’s Internet technologies. Marketing and the Internet Much of the world’s business today is carried out over digital networks that connect people and companies. The Internet, a vast public web of computer networks, connects users of all types all around the world to each other and an amazingly large information repository. The Internet has fundamentally changed customers’ notions of convenience, speed, price, product information, and service. As a result, it has given marketers a whole new way to create value for customers and build relationships with them. Internet usage and impact continues to grow steadily. Last year, 74 percent of the U.S. population had access to the Internet. The average U.S. Internet user spends some 60 hours
Online marketing Efforts to market products and services and build customer relationships over the Internet.
Internet A vast public web of computer networks that connects users of all types around the world to each other and an amazingly large information repository.
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 access.
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 researcher. “The shift over these nine years has been steady and profound.”
31 All kinds of companies now market online. Click-only companies operate on the Internet only. They include a wide array of firms, from e- tailers such as Amazon.com and Expedia.com that sell products and services directly to final buyers via the Internet to search 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 Encyclopedia Britannica). Many click-only dot-coms are now prospering in today’s online marketplace. The success of the dot-coms has caused existing brick-and-mortar manufacturers and retailers to reexamine how they serve their markets. Now, almost all of these traditional 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 super stores 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” positioning by offering a full range of contact points and delivery modes—online, catalogs, phone or fax, and in the store. No click-only or brick-only seller can match that kind of call, click, or visit convenience and support.
Online Marketing Domains The four major online marketing domains are shown in Figure 17.2.