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The Battle of Business

So how does this fit with e-business today? E-business "has become just business," the CEO of IBM recently said. And he's right. Thinking that doing business online is different and apart from doing business offline is a mistake. Those executives mentioned in the Yankee Group report, based on a survey of Internet strategists at some 200 large and medium-sized U.S. companies, were not thinking in terms of an integrated marketing strategy. Online and offline business strategies are not two distinct activities apart from each other. They should be combined into one integrated strategy.

And it can be done. The evidence is out there on the web in plenty, but two examples are REI and L.L.Bean.

REI

REI's web site has become the chain's biggest store. In addition, the 62-year-old outdoor gear and clothing retailer claims that online sales aren't cannibalizing their traditional store sales. In fact, the opposite is happening. Their online customers actually spend more in their REI brick-and-mortar locations. In other words, both in-store sales and online sales grew, showing no cannibalizing at all. REI has been able to integrate its web site with its two other sales channels of traditional stores and mail order catalog.

Through cross-marketing, their retail stores and catalog help drive customers to the web while generating steady revenue streams for all three channels. But REI goes even further with their integrated strategy. In-store cash registers have been web-enabled, allowing cashiers to order online for customers who couldn't find items at a store. Internet kiosks inside the stores allow shoppers to research or order products on their own. Customers can purchase products in a variety of ways—directly from these computers, from the Internet-enabled cash registers at the store, by taking in-store products to the registers, or by ordering other products for home delivery and paying for all of it at once before they leave. Finally, the "shop the store's web catalog" message is imprinted on receipts, newsletters, emails, etc.

The REI web site also offers the opportunity to learn basic outdoor skills, interact with experts, and even download customized topographic maps for hiking. If you are an REI member, you can use the site to update your mailing address and get exclusive "members only" updates. The site even offers access to REI Adventures, their adventure travel company.

Now that's an integrated marketing strategy.

L.L.Bean

L.L.Bean has yet to take the full plunge into a chain of retail stores, so they're not as multichannel as REI, but this well-established company has nicely integrated their catalog operation into their web site and found ways to communicate in real-time with customers on their web site.

L.L.Bean has risen to their level of success by virtue of two core characteristics of the company:

  • Stubborn adherence to customer service

  • Steadfast refusal to let excessive technology interfere with the shoppers' experience on their site (see my InformIT article "Is Your IT Staff Giving You the Business?" for my take on this strategy)

L.L.Bean integrates their catalog and Internet channels by using the 200 million catalogs they mail each year to advertise their web site. And to contradict the executives in the Yankee Group report who were down on the Net because of its low ROI, the L.L.Bean web site is the fastest-growing, most profitable source of revenue for them because it's their primary area for generating new customers.

L.L.Bean also invested in a real-time customer service interface in which their customers can chat online with an L.L.Bean customer service representative to discuss products, order status, or anything else the customer may need.

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