Retailers shift their ad spending from TV, radio and print ads to digital ads.
Perhaps more than in any other product category, the retail market for computers, consumer electronics and digital music is constantly reinventing itself—and in a way that only the Internet can deliver.
Perhaps more than in any other product category, the retail market for computers, consumer electronics and digital music is constantly reinventing itself-and in a way that only the Internet can deliver.
It should come as no surprise, then, that six of the retailers in the Internet Retailer Top 50 Best of the Web for 2004 are setting new standards in the way consumers shop for computers, entertainment systems and even individual musical recordings and movies. If the biggest challenge still facing online retailing is being able to offer some of the same sensory experience shoppers get in a store, retailers in this group are making headway in offering that experience like never before.
Best Buy Co. Inc.’s BestBuy.com, Dell Inc.’s Dell.com and Apple Inc.’s online iTunes Store on Apple.com/iTunes are taking advantage of the web’s forte in delivering digital products directly to shoppers at home with downloads of musical tracks. Although a growing number of other web sites are doing the same, the beauty of this strategy lies in how retailers are leveraging it to build their online customer bases for their complementary product lines.
When Apple’s iTunes began offering downloads of digital music in spring 2003, it helped to make Apple.com a destination site for a new crop of customers that it can also woo with computer products.
Indeed, the new opportunities in cross-selling computer and entertainment products are pushing market leaders to renew themselves-as Dell and Best Buy are doing. Dell, whose expertise in selling direct to customers with services like online product configurators, has redesigned its web site as a more consumer-friendly place to shop for digital entertainment as well as computer products.
But just as Dell isn’t taking its leading market position in PC sales for granted, neither is Best Buy as a leader in consumer electronics. The recent redesign of BestBuy.com closely ties it to the promotional strategy of Best Buy’s 550-plus stores, offering shoppers the same promotions whether they’re shopping online or looking at a store circular.
Service and value, of course, remain at the top of the list in successful retailing, and that’s a mark of all the merchants in this section. GoodGuys.com, which does most of its site development in-house, proves that a lean operation can offer a strong selection of entertainment products, with some 50 brands in its mix. MusiciansFriend.com has figured out how to serve its niche of professional musicians as well as a broader base of consumers. And Netflix, which revolutionized the rental of DVD movies, continues to stay in the forefront of its market. And yet it looks forward to the day it offers even better service by delivering its digital products directly over the web.
For some retailers, a web presence helps to shore up a multi-channel presentation by offering a complementary experience that encourages cross-channel shopping. Then there’s Best Buy. When a retailer enjoys the kind of advantage that Best Buy Co. Inc. enjoys in consumer electronics through its chain of 550-plus stores, it’s not a bad idea to design its web site to copy the marketing image put out by its stores.
So when BestBuy.com re-launched in summer 2003 under a complete redesign, its home page mimicked image for image the same face that reaches millions of consumers each week on behalf of Best Buy stores-the weekly advertising circular. Now, whether customers read the advertising circular, walk store aisles or browse the web site, Best Buy will deliver a consistent shopping and branding experience. “The redesign allows us to move into a unique multi-channel space where we can offer customers seamless shopping both online and in-store,” says Barry Judge, vice president of consumer and brand marketing.
But the new BestBuy.com offers more than just the same promotions found in the circular. It also extends an image for which the stores are known-the advice of knowledgeable salespeople who can advise shoppers on the intricacies of the latest offerings in digital entertainment and computer products as well as appliances and vacuum cleaners. Its home page offers a new research center that provides answers to pre-set questions about products highlighted for sale in an adjacent merchandising box.
Among other improvements, it also provides a more sophisticated site search function that shows search results in a drop-down list organized by product section; it also lets shoppers sort search results by relevance or brand. The shopping cart suggests complementary products with direct links to their buy pages. Shoppers can also link from the cart to add a product to a wish list, connect to an online application for financing and purchase a product service plan.
Best Buy had no choice but to design a web site that would offer a shopping experience to strongly complement its in-store experience, says Dave Ricci, analyst with investment research firm William Blair & Co. “Succeeding in the dot-com space is a must-do for them, because many people interested in consumer electronics are very web savvy,” he says. “Best Buy is the leader, and they want to further develop their front edge.”
He warns, however, that it will have to keep perfecting its site to keep up with consumers’ demands. “If they play their cards right, they’ll be the pre-eminent player in consumer electronics,” he says.
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