Date: June 1, 1999

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The "eRetailing '99" conference was held
May 16-18 at the San Francisco Marriott
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Dear Readers, Clients, Partners, Friends:

What follows are more highlights from what we learned at this recent second gathering of online retailers and marketers. As in October 1998, the event was sponsored by Shop.org and RT Magazine, with other sponsors including Compaq, 3Com, America Online, Intel, Visa, and Pandesic.

Since all the sessions, with the exception of the two morning keynotes, were panel discussions, we never heard any one speaker present at length. Rather, knowledge was imparted in more rapid-fire, bite-size chunks--with panel members reacting to one another or responding to questions from the moderator or the audience. As such, "in depth" and "continuity" are not terms that come to mind to describe these things. You have to listen real carefully to pick up on some of the finer points, and try to ask follow up questions at the end or later if you can track the person down. Luckily, however, your dedicated servants at GT&A were all ears and taking notes like maniacs, if we could get back into the room in time from all the schmoozing going on in the hallways (which is where much of the good stuff really happens at these events!).

Anyway, I decided, rather than try to organize this report by subject, I'd simply do it by session, from Sunday through Tuesday. The discussions tended to stray from the appointed topic, anyway, so what I did was just grab the most interesting comments when we heard them--no matter if they were 'on subject' or not -- especially those that included specific or factual comments of a given company's experience with online sales. In other words, we tried to grab onto the stuff that's hard to come by--the insider experience, the insight into what makes these online retailers successful, the lessons they've learned along the way, the pitfalls to avoid, etc.

We hope the report helpful for you. If it is, please tell us, because we've actually been wondering lately if we're delivering enough value with these conference reports to make them a business offering someday. So, how about this--even if you don't feel like writing an email response, just type in number giving us a rating--on a scale of 1 (go away) to 10 (can't-live-without). Okay?

Sunday afternoon 3:30 panel, "The Business of E-Commerce"
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* A great first question was asked by an audience member, challenging the panelists: "I'm a retailer with a big investment in bricks-and-mortar (300 stores). What are the 3 or 4 best things I can do, strategy wise, to go onto the web?" This answer (a long one) is a compilation from several of the panelists: "Figure out a how to create integration between the stores and the Web--synergy. The tough part is how *not* to antagonize the stores. Leverage the investment already in place, including relationships with suppliers. And give serious attention to planning promotion for the site--determine the techniques that will drive people to it, realizing they will largely be the same people (or types of people) who go to your stores. Crawl, walk, run--and realize it's not about technology, but about serving your customers better....and that *can* include self-service. Put your ear to the screen and start listening to your customers--unlike Southwest Airlines, for example, where you can't even send an email from their site! Do you believe that?"

* A good second question: "How do you create 'community'?" A great answer, simple and to the point: "Provide more information. You build trust that way." And a followup question: "How do you deal with customers' privacy concerns?" The answer: "Open disclosure--tell them what you're doing with the information you ask for."

* "What percent of visitors to a commerce site buy?" asked another person. "Well, Yahoo Store says one percent." But another panelist answered: "It's really not well measured yet. And what about those who solved a problem on site, then bought offline?"

* To the question "How are sites dealing with non-U.S. shipments?" one panelist, from a web development shop in San Francisco, had an interesting response. "One of my clients is successfully shipping 'zoot suits' all over the world, using Fed Ex and others, and it's working fine."

* "How often should a web site last, before 'refreshing' or redesigning it?" was another great question. The answers, from a couple of panelists: "At Compaq, we redesign almost every quarter, responding to customer research." And from the web development shop principal: "With 'Generation Y' sites, you have to change really often! So, the answer really depends on your audience demographics."

* A branding question followed: "When setting up affiliates, aren't you giving up control of your brand?" The very insightful answer, I thought, was: "The idea is to realize everyone is or will be disintermediated. The key is to keep asking, 'How can I bring value to the affiliate?'," said Cliff Sharples of Garden.com. Added a partner from PricewaterhouseCoopers, LA: "The trend is toward virtualizing the entire value chain."

And here are several great pieces of wisdom that resulted from a rather lively Q&A session following this Sunday afternoon session (which was a bit more leisurely than the more rushed schedule of Monday and Tuesday):

* On the subject of web site traffic anaysis data, here's an analogy any retailer can understand: "It's equivalent to having a *camera* in your store."

* How much does it cost, or should it cost, to set up an online site? "Don't go cheap. You need to spend as much on your online store as you would on a new store in your chain. If you do, it'll be your top store within a year!" The fellow speaking helped Macy's put their Bridal & Gist Registry online and said "it became their top store within a week."

* When the frequently occurring question of advertising media mix (online vs. offline) came up, one of the panelists had a very pointed answer: "Traditional media is the way to go. A recent study cited in Ad Age found that 85% of people who go to a site do so from hearing about it in 'the real world'."

* Can an online store really expand a traditional retailer's market? "Traffic on the Victoria's Secret web site is 70 to 80% men--it's a whole new franchise for them."

Hmmmm...guess I'll have to check that one out (strictly for research purposes, of course). Watch for our reports on the Monday and Tuesday sessions of the "eRetailing '99" event next!

best regards,
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Graeme Thickins, Founder & Principal Consultant
GT&A Strategic Marketing Inc.
*Twin Cities *LA *San Francisco *Seattle
Voice Mail: 612/944-1672
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