CEO Roland Smith will retire and Troy Rice will oversee e-commerce as Office Depot’s new chief operating officer.
(Page 2 of 4)
The combination of web and TV/video programming is also reaching into stores, where Wal-Mart runs its unique Soundcheck content, based on in-house and Macromedia Flash technology, on its in-store TV network as well as on big-screen high-definition televisions in its consumer electronics departments.
The right time for engagement
The multi-channel strategy is all about engaging shoppers at the point they’re mostly likely to make a purchase, whether online or in a store-a capability not possible in traditional forms of entertainment-based advertising, experts say.
But while the transition from retailing into a hybrid form of retailing and entertainment is presenting retailers new opportunities as they explore ways to capitalize on the convergence of web and media technologies, it’s also raising questions and presenting new risks: Are retailers media moguls or entertainment providers or merchants? Will they alienate customers if their attempts at mixing retailing and entertainment results in a clumsy or overly promoted shopping experience? “While developing new revenue streams, it gets into a fuzzy space regarding what business a retailer is in-is it a retailer or a media company,” says Jim Okamura, Chicago-based senior partner with retail consultants J.C. Williams Group.
Profit or not?
Some retailers, he adds, have been considering whether media properties, including in-store TV networks as well as online video programs, should develop into profit centers based on advertising revenue, or maintain a lower profile as a means of channeling trade promotion funds from suppliers, or operate independently of advertisers. The wrong decision, Okamura says, could lead to an overdose of in-your-face marketing. “It could turn customers off, and those are the things that keep marketers awake at night,” he says. “They’ll ask, ‘Have we overdone it?’ Time will tell.”
Retailers so far are being cautious about revealing early results of their dive into the realm of Hollywood, saying only that early feedback from customers is as good as or better than expected. A spokesman for Amazon declines to elaborate other than to say that pilot showings of the Amazon Fishbowl with Bill Maher program brought in unsolicited, complimentary e-mails from Amazon.com shoppers. “Our customers are very involved in our web site and the Fishbowl feedback has been very positive,” he says.
While skimping on the details, however, the new breed of entertainment-focused retailers is sending out the collective message: “Stay tuned for more.” Amazon’s Fishbowl program-which launched as a pilot during January’s Sundance Film Festival in Park City, Utah, offering a glimpse at what will run each Thursday evening for 12 weeks this summer-will present content, including interviews and musical performances, related only to the category of books, music and movies. But Amazon is planning on additional series related to different retailing categories. “The common theme is that they’ll be innovative, interactive ways for our customers to discover new products,” the spokesman says.
J.C. Penney, whose Academy Awards marketing campaign was its largest-ever promotional event-it coincided with a temporary store in New York’s Times Square stocked with designer merchandise that could be purchased only on web-based kiosks (See Kiosk story, p. 40)-says the campaign was a harbinger of things to come in the hybrid world of mixing the Internet retailing and TV/video programming. “It’s new ground for us to have that level of integration between TV ads and online retailing,” a spokesman says. “It seems to be a natural process to integrate what’s shown on TV with what’s available on our web site. To go instantaneously from one to the other, that’s pretty exciting.”
Adds Walmart.com’s Janes, “Soundcheck fits well into what we’re trying to do as a company overall. When we show Soundcheck music videos on our high definition TVs in our stores, it’s a great opportunity to showcase those TVs.”
Well developed technology
Industry analysts and technology experts agree that the technology behind this new form of entertainment retailing is solid and already capable of more sophisticated eye-catching and purse-opening ways of engaging online shoppers. Moreover, the market forces behind retailing, TV/video programming and advertising are pushing the three industries closer together. Indeed, online presentations of interactive mixtures of merchandising and entertainment may quickly become a new competitive standard for online merchants, experts say.
“Retailers and manufacturers know that a lot of buying decisions are made in the store or online, not when consumers are sitting in front of a TV watching a commercial,” Whitfield says, adding, “Wal-Mart is becoming one of the most watched TV networks.” Mixing TV/video programming with the web also caters to the impulse buy and the introduction of brands and products when shoppers’ interest in making a purchase is at a peak, she adds.
Also supporting the ongoing development of online entertainment as retailing is the ability for retailers to proceed at their own pace and with their own strategies. Nordstrom, for instance, is taking a more subtle approach to mixing video programming and online retailing, but one that’s nonetheless creating a marketing splash, Whitfield says.
The designer speaks
In its Nordstrom Silverscreen, which offers unique re-creations of pop music videos on a web site of the same name, Nordstrom engages customers with interviews with designers of fashion apparel sold on Nordstrom.com. “I’ll Tumble For Ya,” a 1980s music video showing singing and dancing teenagers and originally produced by The Culture Club, is shown on NordstromSilverscreen.com in a revised version accompanied by a “Behind the Scenes” video that explains how dancing and fashions have changed since the original performance.
In the Behind the Scenes video, the choreographer details the new methods of dancing; the stylist explains that the new dance moves required a new type of apparel offered by a particular designer, Diane von Furstenberg; then von Furstenberg herself appears to explain how and why she designed her fashions in a particular way.