Will Amazon.com and other e-tailers replace your store?

Will Amazon.com and other e-tailers replace your store?

I recently presented an overview of an exciting, and often overlooked and underutilitzed, opportunity—online retailing, or e-tailing as it's known today.

As the continuing high cost of doing business with "brick and mortar" retailers show no signs of abating, it is with anticipation—and early metrics showing success—that brand owners finally have a new opportunity for growth.

Online retail offers a longer reach, higher profit margins, more focused contact with core consumers, and better marketing investment paying offs. Not since the advent of "guerilla marketing" tactics has a newly created path to market offered so much hope.

Amazon.com is but one of the many new Internet vehicles that have embraced buying products from brands in every segment of the beverage business. Amazon then offers these diverse products to its online opt-in consumer base (reportedly over 120MM today), at very competitive prices, delivered directly to home or office in as little as two days.

On-the-fly evolution

Amazon.com has been in the market for almost two decades, but recently it has really begun to give traditional retailers a run for their business. I personally believe that the online retailer is the future. How can a brick and mortar business be as cost effective as e-tailing, given the flexibility and lower cost of operations as well as direct to consumer marketing that e-tailers embrace? They can make on-the-fly changes to programs and in minutes reorient and redirect efforts online to reach target audiences. This is virtually impossible to do traditionally in FDM.

Instant sales data

Without delineating all the different programming offered by e-tailers like Amazon.com, suffice it to say, that with over 120MM consumers to market products to, these marketing directives can show almost immediate impact as sales are monitored by the minute in real time. This is yet another feedback mechanism completely unavailable at FDM retailers today. At the rate that consumer trends shift in today’s market, waiting for IRI/Symphony or SPINS data to arrive, months after sales occur, retailers are forced to rely on potentially outdated information.

New sales and marketing tools

Some of the idiosyncratic tools used on Amazon.com include Adzinia, IMDb, and DPR. Adzinia offers a brand owner to buy-in to direct media against a specific targeted audience, with an investment of dollars, yielding almost always a guaranteed return (or purchase of product by Amazon.com) of three times the investment! That is almost unheard of in the industry, right?

In addition, the use of IMDb (Internet Movie Database) in order to place ads created for movie searchers online, helps to spur sales. DPR (digital photography review) is yet another vehicle by which advertisers can place specific ads about their products next to or inside photography pages online. These are but a few of the tools that e-tailers use to market directly to target consumer groups.

Take time to check into online retailing. I for one predict a robust and profitable future in this innovative, flexible and fast-changing route to market.

Do you think e-tailing is the future? Leave a comment.

James Tonkin, president of HealthyBrandBuilders, is a private sector brand management and development professional. He has more than 33 years of experience with domestic and international corporations including food and beverage production, manufacturing, sales, marketing and distribution.

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