In its second-largest acquisition, Amazon buys the company for $970 million.
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Fulfillment is also affected by the web. For instance, a retailer who relies on the manufacturer to fulfill web or catalog orders has to communicate with that supplier via the web to know product and order status all the time. If there is a fulfillment problem the retailer can tell the customer right away. And rapid communication with suppliers is equally important for chains. A web-based supply chain allows a trendy fashion retailer, for instance, to be up to the minute with fashions while they are hot. A web-based supply chain also allows online collaboration with product designers to cut weeks out of the design and sourcing of products to get them to shelves while they’re hot.
The web allows an infinite variety of marketing approaches, but a retailer has to make sure its marketing suits its audience. A discount mass merchandiser, for instance, would want e-mail marketing pieces not to be too elaborate since many customers might not have sophisticated computer systems. But a retailer of high-end, electronic, got-to-have-it gadgets probably would want a campaign that demonstrates the technological sophistication of the retailer and makes the recipient feel cool for having adequate technology. In addition, a retailer must know how its customers use the web-for shopping, for buying or for finding a store.
Finally, the web affects store operations. Web-enabled kiosks and point of sale terminals help establish a brand. Example: Virgin Megastores has web-enabled listening stations so customers can sample music from 200,000 CDs. That helps Virgin live up to the Megastore name. Web-enabled gift registries appeal to young people whose families may be scattered across the country. They like the idea of registering at Field’s in Chicago so their aunt and uncle in Ottumwa, Iowa, can buy them a gift online. And web-based educational initiatives for store personnel quickly address the needs for training and re-training so sales associates can provide experiences to customers that match the retailer’s brand.
Who will last?
A retailer’s identity is shaped by the communication and physical display of its core message, which is the brand, through every facet of the retail operation and that brand must translate onto the web. From the product assortments and promotional offerings, to the store shelves and associates serving customers, all elements are essential contributors to the delivery of the brand promise across all channels.
Soon, the leading retailers will be masters of the brand platform, combining the best of both worlds: uniqueness and efficiency. Wal-Mart Stores Inc. and Target Corp. are likely to be the only mass merchandise discounters standing five years from now because they are already mastering uniqueness-Wal-Mart, driven by low prices, Target, by offering low prices in an upscale setting, and both by mastering the supply chain. So retailers who expect to grow will find it impossible to compete via discounts, promotions and low-price specials.
Thus they will have to build brands that appeal to specific segments -ethnic, life-stage, aspirations, and emotional or needs-based identities. Then they will have to build a brand platform that fully supports their brand strategy-and much of that platform will begin and end on the Internet.
Geri Spieler is research director, Gartner Group Inc.’s Gartner G2 Retail Services Group. She can be reached at firstname.lastname@example.org