Online partnerships between bricks and clicks will secure brand recognition and change the future of e-commerce profitability.
What's in a name? Juliet asked this of Romeo after they discovered their family branding may force them apart. In the case of true love a name may not make much of a difference, but in the retail industry brand recognition leads to sales. And retailers, who have established a brand following, need to do everything they can to maintain positive brand awareness no matter where their name appears.
When e-commerce came on the scene, brick-and-mortar operations feared their aisles would become deserted as consumers logged on to Web sites in search of more variety and convenience. Many retailers felt pressure to join the online bandwagon without the infrastructure or experience to handle individual order fulfillment or to maintain customer relationships through multiple channels. The retail brand they worked so hard to promote in the physical world through advertising, promotion, and customer service, suddenly became damaged when it went digital. Meanwhile pure play e-tailers that did not have an established brand or infrastructure struggled to rise above the Internet noise and compete with newly christened brick-and-mortar dot-coms. Recently, headlines tell of retail players choosing to leverage their core competencies and enter into a sort of cyber-marriage by joining forces with each other but keeping one name.
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Online unions give both partners the best of all environments and will change the way retailers conduct e-business. Last year pure play e-tailer Amazon.com and the struggling Toys "R" Us Web site jointly created a fully functioning online toy store. Through the partnership, Amazon gained the merchandising and purchasing power of a traditional toy store, while Toys "R" Us turned over online order fulfillment to the experienced pure play.
Similarly, Borders Group, Inc. will turn over its entire Web operation - inventory, fulfillment, content, and customer service - to Amazon.com this month in an effort to maintain a Web presence without having to operate it. These altered e-commerce strategies give retailers struggling to remain profitable on the Internet another chance to secure their names.com.
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As this concept of cyber-marriages continues, the only concern will be finding a pure play e-tailer worthy of that kind of commitment. Amazon.com is one of the few existing e-power-houses that is attempting to sustain a merger of this magnitude. As a result, some brick-and-mortar retailers have taken matters into their own hands.
In a presentation at the JDA Software Users Conference, Mike Balik, VP business systems of Global Sports, Inc., described his company's e-business strategy for the sporting goods industry. The Internet start-up is a developer and operator of 15 retail Web sites including The Sports Authority and Dick's Sporting Goods. None of the retailers operate their own Web sites; Global Sports seeks out retailers who already have established brand names and manages their Web sites for them.
As described in "Competitors Converge Under The Hood," (June 2001, Integrated Solutions For Ret@ilers), two of the top auto parts retailers (Advance Auto Parts and CSK Auto) knew they could not be successful multichannel retailers without stores throughout the country. So, they merged last year to form PartsAmerica.com. The online store relies on its brick-and-mortar founders for inventory and a 3,000-store physical presence across the United States. But in an effort to maintain their individual names, each store's branded Web site directs shoppers to the joint site.
Brick-and-click retailers that are struggling to reach a profit online cannot risk jeopardizing their customer service in the process. Companies that choose to work together to earn exposure and money on the Internet will become more common down the road. Don't let the Internet give you a bad name - there are options.Questions about this article? E-mail the author at StephRD@corrypub.com.