As Seen on the Web

Posted on by Chief Marketer Staff

WELL, THAT NEVER HAPPENED before.

I think I’ve mentioned that I’m a tough sell. At home, I like my privacy unbroken by advertising. I feed my garbage pail a steady diet of catalogs and mailers. I remove the three Sunday newspaper sections I want to read and recycle the rest while it’s still in the polybag. I give out e-mail permission less often than the Unabomber and just say no when the checkout kid at Best Buy wants my ZIP code.

So here’s the odd thing: I fell asleep in front of the TV one night (not in itself a rare occurrence) and woke up to an infomercial that almost got me.

The ad was a long spot for the Little Giant Folding Ladder, which can be a step ladder, an extension ladder, a work scaffold and so on. In it, that bearded guy from “Home Improvement” and some woman I recognized from a home-repair show extolled the virtues of this collapsible ladder. It rolls on built-in wheels! It can hold a 300-pound man! It folds up and stores under the bed!

And even as I fumbled for the remote, I found myself thinking, “Hey, I might be able to use that.”

I’d just written a story about the future of direct response TV and the possibility of searchable commercials in an on-demand broadcasting world. And one of the quotes that stuck in my head was a thought from Robert Medved, president and media director of Cannella Response Television. “Basically, in the DRTV world, we’re appealing to a customer who is bored,” he said. “DRTV exists in a space where people have downtime, and their brains are fried, and they’re flipping channels looking for something to do.”

Bingo. Too groggy to get up and go to bed, I instead spent 15 minutes watching people do tricks with a hinged ladder. And some small part of my lizard brain said, “Hmmm…I could use this to wash those windows on the side of the apartment.” The infomercial worked, almost.

But there’s a world of significance in that “almost.” I didn’t buy the ladder, and the reason may have implications for the future of DRTV.

Like all good infomercials, this one urged me every three minutes or so to go to my phone and call an 800 number. It also warned me to “keep trying if the line’s busy.” I didn’t even risk a busy signal. Like a growing number of consumers, I went to the Web instead of the phone.

That’s where the signal got garbled. I found the official Little Giant Web site, which was very helpful and highly interactive. But then, after a few minutes of flipping around those pages, I did a Google search on the term “ladder fall.”

I don’t know why. Just bored, I guess.

And there it was, on 20 different Web sites: three-year-old footage of a QVC episode in which some poor tangle-footed studio tech fell while demonstrating an extension ladder. For a few seconds, he was a blur of flailing arms and backward momentum, and then he hit the studio floor 10 feet below with a sickening thud.

On the audio, the QVC hostess kept flacking the ladder while she tried to find out if the poor yutz was dead: “OK, well, that has never happened before…First, we’re going to make sure that Chris is OK…That’s a very slippery floor.” Never mind that the ladder was still obviously standing upright, and that it was Chris who’d slipped.

And it was pretty clear Chris wouldn’t be OK for a long time. The man actually bounced when he hit; for a moment, you could see daylight between him and the linoleum. No, there was traction in Chris’ future, if not reconstructive surgery.

I watched the ladder-fall video a few more times (OK, I’m a bad person) and visualized myself lying at the bottom of the gangway next to my house with my head in a pail of warm suds and my legs at an odd angle. Was I crazy? Buying a 22-foot extension ladder? I’ve fallen off high street curbs. Go to bed, Brian.

Never mind that the clip was three years old, or that the ladder was entirely different in brand and design from the Little Giant. On the Web, I controlled the message. I happened to flip perversely from the safety info and testimonials for the Little Giant to footage of some guy falling off an unrelated ladder.

And this is what makes the Web the wild card in the direct response deck. Yes, DRTV can still work some magic by serving up the right product and the right offer to a properly bored subject. But I can’t help thinking that the infomercial’s days are numbered, at least partly because of the rise of the Internet.

Any infomercial that drives viewers to the Web takes a chance those viewers will dredge up unexpected content. Some of this can explicitly undermine the spot’s message.

A broad search on “infomercial fraud” brought up 30 pages of links attacking everything from Tom Vu’s real estate schemes to Kevin Trudeau’s natural health products. There were even sites attacking a muscle relaxer from a Dr. Ho that involved attaching electrodes to the body and running a current through them. Astoundingly, some customers seemed to have encountered problems with the device. (Imagine.)

But even when the product tries to skip the search phase with an easy URL (for Little Giant it was www.ladders.com), just having that query box floating above the Web page invites users to look beyond the marketer’s controlled message to the unfettered Internet. Studies have shown that most people now use search to navigate the Web, Googling “Southwest” rather than typing it into the address bar. So chances are they’re going to be looking at a page of “ladders” results. Who knows what they’ll find and how it will influence them?

In my own case, the Internet simply served to help me picture myself as Chris, waiting for the EMTs. That broke the spell of an effective DRTV message. My transition from consideration to purchase was interrupted as surely as the Little Giant ladder spot had interrupted my REM sleep.

At the very least, DRTV advertisers probably have to start monitoring their reputation in chat rooms, bulletin boards and blogs. And they probably should consider carefully whether they actually want to send viewers to the Web, where their message may have to contend with other content of marginal relevance but outsized impact.

And Chris, wherever you are: Sorry for laughing. I really do hope you’re all right.

As Seen on the Web

Posted on by Chief Marketer Staff

Online retail sales are growing, and plenty of small merchants have found that the Web is a perfect place to start building a sales empire. But many of them also find that there comes an inflection point in their growth curve when they need a presence in the offline world.

That’s been a hard choice to make: All those decisions about optimal location, per-foot prices and overhead costs are the reasons many operators took to the Internet. But the carbon-based choice may get easier, thanks to a new project to give pure-play Internet retailers a foothold in the brick-and-mortar world. Epicenter Holdings is proposing to set up showcase stores in prime shopping-mall locations around the country that will feature products that have until now only been available on the Web or through catalogs.

The first Epicenter Collection store is slated to open next year in a 200,000-sq.-ft. space in the Polaris Fashion Place mall in Columbus, OH. The store will bring “up to 60” Web and catalog merchants together with some cutting-edge shopping technology that will let customers buy as easily and conveniently in person as they can now do over the Internet, according to Tony Lee, CEO of Epicenter Holdings.

“In a multichannel world, consumers increasingly expect a brand to have a retail presence,” says Lee. “With both catalog and online sales, there are only so many customers who are willing to buy some things, particularly fashion-related items, without seeing them or trying them on first. On the Web, the single largest reason for shopping-cart abandonment is that people can’t see or touch the merchandise.”

Lee points out that some direct marketers who made the leap to branded stores in the ‘80s are now among the best-known names in retail: Williams Sonoma, Sharper Image, Coldwater Creek, J. Jill and Victoria’s Secret. “Ninety percent of their revenue now comes from the retail channel,” he says. “They forged the way. I think the direct industry is now ready for a second wave of direct marketers who want and need to go into the retail world.”

The timing for this leap is right because growth is “somewhat stunted” in both the catalog and online realms, Lee says. On the catalog side, costs are going up and unique names are getting harder to find; the hot marketing tool among Web sellers—search engine marketing—is also increasing in price and in addition is basically ‘brand-blind”, since most searchers start their quest for products with generic terms, not brand names.

Timing is also good on the retail side of the equation, because increased consolidation among established department store chains is opening up anchor positions in a lot of desirable shopping malls. Epicenter’s near-term plan is to grab up those valuable locations in at least 10 malls around the country; in the long term, Lee says, the company hopes to find 100 such positions, always in shopping malls to produce the optimum traffic flow. One of the other stakeholders in Epicenter is chairman Sheldon Gordon, known for developing the Forum Shops at Caesars Palace in Las Vegas and for the Beverly Center mall in Los Angeles.

For Web or catalog marketers, the value proposition is the chance to get into a dedicated retail space with relatively little worry or capital expense. Building a store can cost between $300 and $500 a square foot, Lee says, while renting one can involve a 10- or 15-year lease. “Smaller direct players—or even many large ones—can’t justify the capital and risk involved,” he says. “And they can’t get prime locations within those malls because they haven’t got name recognition. We choose the sites with the best traffic potential, we rehab the buildings and supply the infrastructure costs—air conditioning, lighting, heating. All the merchant has to pay for is the fixtures and fittings in their space. So they can get into retail for $50 to $60 a square foot, about a fifth of what it would cost to open a regular retail store.”

Leases too will be about a fifth of what they are in the larger retail world: two to three years, giving merchants a comfort zone in which to test the concept and see how well it works for them.

The systems component is another possible obstacle for direct marketers looking to set up in retail. Epicenter has created a retail system that it will give to each of its tenants that will allow them to transform purchases at retail into what their own systems can recognize as a direct marketing order to be picked and shipped.

On the customer side, part of that systems infrastructure includes a point-of-sale handheld scanner called a BuyPod. Shoppers will be able to open accounts using the credit cards at kiosks located around the store and get a first-time look at how to buy from Epicenter. They can then use these BuyPods to scan bar codes, get more product information about sizes, colors and other options, and make purchases via a touch screen on the scanner. They will use the scanners throughout the store and then take delivery of their purchases at home, in a combination of retail’s high touch and the Internet’s convenience.

The scanners are not only convenient for customers, but they help keep payroll down by getting the buyers to do some of the purchasing work themselves. (Credit card information is not held in the scanners but in the store’s system, so there’s no danger of that personal information will be accessible to subsequent users.) Customers will also be able to pay at a standard cashier if they wish, but the growing success of self-service checkout at supermarket chains indicates that a large portion of the buying public is ready to ring themselves up.

Still, customers who want to pay the old-fashioned way can do so at a cashier. Lee expects that merchants will also want to make some items available for immediate take-home and will perhaps showcase only their larger or more expensive products.

Merchants will also be able to have their Web sites or catalogs featured on electronic kiosks, so that customers can look for inventory items that may not be featured on the sales floor. Epicenter will also lend its expertise to the problem of hiring and training sales personnel, who will then be employed by the individual merchant and dedicated to that store-within-a-store. As for the product mix within Epicenter’s walls, Epicenter is still in talks with merchants and has not finalized the roster for the first store, but Lee says the offerings will probably range from home furnishings through gifts and apparel to children’s items, toys and sporting goods. “We will probably defer to categories that will get an extra leg up from having the ability to touch and test the merchandise,” he says. “We don’t want to be in the commoditized band, so I don’t think we’ll be introducing any consumer electronics, for example, or general merchandise brand names.”

That final merchant slate will also be chosen with an eye toward finding compatible co-tenants. “Not only does the mix have to fit with the demographics of the market that we’re opening an epicenter in, but each of the stores has to be complementary to the others,” he says.

Epicenter’s preliminary research indicated that merchants interested in crossing channels to the retail side were most concerned about keeping control of their stores and their marketing efforts, Lee says. As a result, Epicenter is aimed at producing a setting in which sellers can market themselves as they wish; the company will earn its revenue from the rental stream and won’t take any portion of tenants’ sales revenue.

The company is in discussions for four or five more locations and expects to announce more stores soon, a move that Lee considers crucial. “Many of these online or catalog merchants will want to open more than one store,” he says. “We have to satisfy them early on that a successful Epicenter store is an expandable concept that can be leveraged. We want to partner with them to help build their hundred-store national chain. That could be a very substantial piece of business that could double or perhaps even triple their sales.”

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