The online retailer has spent nearly $300 million acquiring three shipping software vendors over the past nine months.
In the foreseeable future, producers of infomercials will be able to tell viewers to click on their TV screens to order their products immediately over the web.
Each September, the Electronic Retailing Association hosts its annual conference, a gathering of professionals who pioneered the first generation of electronic retailing-the now ubiquitous infomercials broadcast over radio and television. These direct-response TV marketers of health and beauty aids, exercise machines and kitchen utensils are a lively bunch of entrepreneurs known for their hucksterism on the airwaves.
As a group, they trace their roots to the Golden Age of television-40 years before the advent of Internet retailing-when Ron Popeil first went before a TV camera in 1956 hawking his father’s invention, the Chop-O-Matic. When Popeil later achieved wealth and fame by selling through TV spots his own inventions, including the Pocket Fisherman, he established the television infomercial as a viable direct-response sales medium.
Today, the DRTV industry has grown into a $107 billion annual business, thanks to the ingenuity and showmanship of its top pitchmen. The industry has also gotten a huge lift from the growth of cable television, which has expanded the number of TV channels in a given market from 10 to well over 100, providing an efficient forum for infomercials.
One might think that this group would be leading the Internet retailing industry, given its 40-year head start in electronic retailing. Yet, as I made my way through the ERA conference last month at the Paris Hotel in Las Vegas, I found surprisingly little to do with Internet retailing. Only two sessions out of 17 featured Internet topics. And the Exhibit Hall featured conventional DRTV vendors, including the people who make or schedule air time for infomercials. The mainstream providers of web retailing solutions, which exhibit regularly at the DMA’s Annual Catalog Conference and the National Retail Federation’s annual show, were poorly represented at the one show that has “Electronic Retailing” in its name.
This does not mean that members of this association are not interested in the Internet. They are. They scooped up 600 copies of Internet Retailer from our booth at ERA within a few hours. But as a group they are not setting the standards of excellence in Internet retailing in the manner that catalog companies and retail chains are. This is puzzling to say the least. The digital cable TV hook-up that delivers their infomercials to millions of American homes is increasingly the same pipe used to connect those homes to the Internet. And the pitchmen in infomercials know just how to connect with an audience-a skill that will be paramount as the web becomes a truly interactive retailing experience.
Furthermore, the DRTV folks are situated at the crossroads of two converging media-the Internet and cable television. In the foreseeable future, producers of infomercials will be able to tell viewers to click on their TV screens to order their products immediately over the web. Of course, all other merchants and brand name advertisers will have the very same capability. And there is no guarantee that those who mastered the technology that defined electronic marketing in the latter half of the 20th Century will be the same ones who master the technology that is shaping electronic marketing for the first half of the 21st Century.
While the ERA is far from being the association of Internet retailers and its conference lacks the Internet content of the DMA or NRF shows, future issues of this magazine will track the progress of DRTV marketers in converting to the web. Any industry that gave us the marketing genius of a Ron Popeil holds considerable promise for reinventing web retailing.