Big retailers begin to see the power of online marketing

Some sectors of business have taken to online marketing as if it were built for them. Others have been slower to move online. And then there’s retail. Seeing the figures released by online retail trade body the IMRG every January reporting another bumper Christmas for internet sales, you’d be forgiven for thinking that retail as a sector had “got it”. But while some retailers, notably those in such specialist areas as music and consumer electronics, have been moving online aggressively, many other high street names have no internet presence at all.

During the dot-com boom, much of the talk was of online retail taking over from the high street owing to its lower costs and greater convenience. Like so many other dreams of the period, that turned out to be wildly over-optimistic. One of the most celebrated failures of the dot-com crash was Boo.com, which planned to sell designer clothes online. Although the company’s founders were pilloried for their extravagant spending, one of the fundamental flaws was that hardly anyone had a connection fast enough to allow them to view images of the clothes online.

The UK’s dramatic transition to broadband connections in the past few years has changed all that, but many retailers have been slow to react. It’s only relatively recently that many of the biggest names in the UK have begun to realise just how important online could be to their operations.

So it was interesting to read a few days ago that the price comparison site Kelkoo had signed deals with a number of brands including Adams, Argos, Body Shop, Camper, Cotton Traders, La Redoute, La Senza, Laura Ashley and Racing Green to appear as merchants on Kelkoo and Yahoo! Shopping. Up to now such operations, which allow shoppers to compare the price of a specific item across a number of retailers’ sites, have been dominated by white goods and consumer electronics.

But while this shows some retailers are starting to realise the opportunities online marketing offers them, it also illustrates one of their key problems; the sheer breadth of the tools and platforms at their disposal. Beyond the basics of banners, rich media, search and e-mail, Topshop for example has experimented with catwalk webcams, podcasts, style guides and user-generated content around London Fashion Week.

But any approach like this requires close integration of technology across sales and marketing, and indeed a close understanding between the two of both their respective aims and of the information flows required.

In an industry dominated by neophilia, that’s not always easy to achieve. In fact, it’s not uncommon to hear agencies that specialise in strategy complain that clients are so busy chasing after the new new thing that they’re ignoring the basics that would have far more effect on their bottom line. But if retailers are finally grasping the power of online marketing, these are some of the questions they’ll need to address. Because their competitors already are.

Michael Nutley, editor in chief, NMA