Live from ECMOD: U.S. Experts Predict What Lies Ahead

Oct 27, 2006 1:53 AM  By

London–”Multipositional marketing” and “e-bops” may not be buzzwords yet. But if several of the speakers here at the European Catalogue and Mail Order Days have their way, they soon will be. In the closing session, futurist Don Libey, e-commerce expert Amy Africa, and catalog consultant Jack Schmid gave their predictions about the future of multichannel commerce.

In the near future, said Africa, the search landscape will continue to change, as rising costs drive more companies out of pay-per-click advertising. The emphasis will be on organic search and Website optimization, as well as more-affordable paid search options such as comparison-shopping engines. E-mail tactics will change, too, from the mass mailings that still dominate to “on-demand e-mail.” Here’s where e-bops come in: Africa coined the term to stand for “e-mail based on past purchases.” Companies that are already using on-demand e-mail are seeing much higher conversion rates, she said.

Also, “I think after the holidays you’ll realize you have enough traffic,” Africa said. More companies will turn to analytics packages to help them optimize the traffic they’ve got. The sometimes hefty price tags may have kept some online merchants from investing in analytics software, but Africa said that a package will pay for itself within three to six months.

Schmid also spoke of the importance of analytics, in terms of tried-and-true metrics such as average order value and margins. “As you become a more astute online marketer, don’t neglect to keep an eye on metrics,” he said. A multichannel merchant’s excitement over having the majority of its orders coming via the Web, for instance, may prevent him from seeing that the average online order is significantly smaller than that of the average offline order or that because of Web-specific promotions, the margin has eroded.

For his part, Libey predicted “polarization” of the larger and the smaller multichannel merchants. Only the very largest companies will see true multichannel convergence, he said, while the smaller players will operate via just one or two channels. And “given the amount of money coming into multichannel marketing,” he warned the specialty marketers, “you can expect well-funded competitors into your niche.”

Libey also said that companies will move beyond multichannel marketing to multipositional marketing–and so far only smaller and midsize merchants are practicing it. Multipositional marketing is a way of leveraging your company’s investment in a particular market by targeting a somewhat different demographic or user. For instance, Eagle America, which sells woodworking tools via its namesake catalog and Website, sells lower-priced tools via the PriceCutter catalog and site. The brands are not cross-promoted; a consumer would have no way of knowing that both brands are part of the same company. By keeping the two brands distinct, Eagle America can capture customers who might not buy the more expensive items of the core catalog without cannibalizing its core audience via the less-expensive brand.