To: Sarmad Y. Hermiz who wrote (61889 ) 6/11/1999 10:42:00 AM From: Glenn D. Rudolph Respond to of 164684
WHO IS LEVERAGING THEIR ASSETS TO DRIVE WEB TRAFFIC? - We‚re looking for more signs from land-based retailers that they are leveraging their assets to drive Web traffic to their sites. To date, most retailers have taken the first step towards creating awareness of their Web sites by putting their URLs on receipts, bags, and advertisements. However, we believe that in order to distinguish their Web sites and evolve into true online destinations, retailers must pursue even more creative strategies that integrate their online and offline businesses. During the coming months, we expect more retailers to develop loyalty programs which reward customers for shopping with them either online or off line. We also expect more retailers to provide their customers with reasons to check out their Web sites; following registration, retailers will have a means of communicating directly with their customers on line. For example, as discussed above, we are impressed by how eTailer Alloy Online uses its catalog to spark interest and drive traffic to its Web site. In their current summer catalog, Alloy advertises contests where online users can write rap lyrics for a popular recording artist, win free tickets to a summer teen movie, and enter a tee shirt design to be featured in the fall catalog. In our view, many traditional retailers have not fully capitalized on their greatest asset: their existing customer base. Some land-based giants have millions of customers, yet they do not necessarily know how to reach them online. We anxiously await Wal-Mart‚s upgraded online offering, planned to relaunch later this year. We expect their strong brand, large retail-store customer base, and purchasing power with vendors could fuel rapid online growth. However, we do not believe Wal-mart‚s success online will be at the expense of Amazon.com (which served its 10 millionth customer this week) as many have speculated. Rather, we see Amazon‚s early mover advantages compounding over time as they „push‰ (through targeted offers) and pre-sell more items to their customers based on historical shopping and buying data. We also believe Amazon is evolving into the Internet‚s portal to online shopping, whereby the company could receive bounties or lead fees from other companies anxious to reach the Web‚s largest group of qualified online buyers.