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This article was prepared for the November 21, 2001 edition of
U.S. 1 Newspaper. All rights reserved.
Retailers Need All the Channels They Can Get
Christmas — the shopping event that begins before
Halloween — is upon us, and all eyes are on cash registers. Our
economy, indeed our entire way of life, we are told, hangs on the
degree to which shoppers get out there and snap up clothes, home
and electronic goodies in the coming weeks.
So buy we must. But among the questions consumers face is — where?
Retailers hang on the answer.
For as vital as mass year-end shopping may be to the economy at large,
it is life or death for individual retailers already confused about
where to put their resources. Another storefront? A better Internet
site? A catalog?
Bernadette Tiernan suggests that savvy retailers use all three
to lure shoppers to their wares. She wrote her new book, The Hybrid
Company, before September 11. Subsequent events only add urgency to
her prescription for achieving better results through multiple selling
"If people have fears in the channel that is your only channel,
what do you do?" she asks. Internet warnings about mall attacks
have scared away shoppers — even though they turned out to be
hoaxes. Anthrax fears are causing some to poke catalogs into the dust
bin with a long stick. And concern over credit card safety on the
As if all of that wasn’t enough, Tiernan points out that many
shoppers are exhausted this year. "With the downsizings, everyone
has more to do," she comments. "Sometime you just feel like
lying around with a catalog."
All of this means that retailers — now more than ever — need
all the selling channels they can get. Forget the debate about which
is better — an Internet site or a storefront. Businesses need
both, and they should have catalogs too.
Tiernan founded Tiernan Associates, a Ridgewood-based consultant firm
for small businesses, in 1986. Over the past 10 years, one of her
clients was the New Jersey Small Business Development Centers. In
January, she will become associate director of the state-wide SBDC
(www.yourbizpartner.com). She is now director of E-Business Education
for the SBDC at the Rutgers Graduate School of Management. She also
teaches Rutgers undergraduate courses in E-business.
In this excerpt from The Hybrid Company (Dearborn Trade Publishing,
$27), she explains what a hybrid company is and why its multiple
provide stability in any sales environment:
Dictionary, describes anything derived from heterogeneous sources
or composed of elements of different or incongruous kinds. Hybrid
companies are a synergistic combination of E-commerce, a physical
presence (such as a storefront, a kiosk, or an open office), and some
form of print (such as catalogs of all shapes, sizes, and quality).
Corporations with a hybrid structure in both their physical form and
their marketing endeavors have the highest profitability and longevity
the storefront window of a boarded-up shop in a full-page New York
Times ad that accused E-commerce of the demise of community. "Why
this crusade against small business, while we subsidize trendy titans
of E-commerce?" the ad questioned, addressing the tax moratorium
for online sales.
Can’t these poor dot-coms get a break? First, we unilaterally and
collectively blamed them for the demise of our retirement funding
when their stock values plummeted. Then they were accused of attacking
America’s heartland in an assault on human contact and the
of a culture of isolation. Many of these dot-coms weren’t titans;
some weren’t even trendy.
Statistics failed to support prophesies of doom and destruction for
malls and Main Street. In fact, for several consecutive holiday
consumer sales figures soared exponentially for all of retail, online
and offline. In addition, both business-to-business E-commerce and
traditional sales experienced dramatic growth. The predicted
of traditional sales venues by competitive dot-coms never occurred.
If anything, the dot-coms influenced the extension of the holiday
shopping season into one big bonanza of event after event. Seasonal
December peaks were repeated in the first quarter for several years.
Online merchant promotions of all holidays from Valentine’s Day
Thanksgiving influenced sales in traditional stores too. No month
passed without a hyped-up holiday, and both online and offline sales
traditional companies have realized a synergistic effect by leveraging
a multiple-channel approach to their business. Aspiring to new IPO
heights by adding ".com" to the corporate logo is no longer
enough to inflate stock value. Our infatuation with dot-coms is over,
and we’re back to a competition of survival of the fittest. Survivors
of the Internet community challenge include tribal members of the
B2B (business-to-business) and the B2C (business-to-consumer) markets,
all advancing toward their billion dollar prizes. A new breed of
companies have emerged as the healthiest survivors.
A hybrid company is a business that reaches its customers through
multiple channels of clicks, bricks, and catalogs in a seamless,
entity. Hybrid companies assimilate E-commerce websites, a physical
presence, and catalogs; each channel promotes and reinforces every
other channel. Although some hybrid companies can operate successfully
with two out of three channels, the E-commerce channel is imperative
in every hybrid model.
hybrid companies demonstrate a deliberate, step-by-step expansion
from channel to channel, mastering one mode and rapidly expanding
to additional channels. Two channels constitute a hybrid company;
however, the most successful hybrid companies operate with all three
channels. Not two or three separate businesses under one name, but
a unified front. Some may accomplish their mission by strategic
of separate companies, but these alliances are invisible to customers
or clients. Customers always see an integrated entity and always
they are dealing with one company.
model are strong. Some experts predict that 80 percent of E-tailers
who do not partner with a traditional retail company face extinction.
Retailers with a combination of physical stores, catalogs, and Web
sites tend to do more business than companies with just one channel,
according to a study for the National Retail Federation (NRF).
integration provides a competitive advantage, according to this study.
Online shoppers tend to cross-shop frequently. And online shopping
has injected energy into shopping in general, building brand and
loyalty in multiple channels. A report by Jupiter Communications (now
Jupiter Media Metrix) revealed that multi-channel shoppers purchase
30 percent more than those who use only one channel.
business-to-business and business-to-consumer sectors. The
potential for hybrid companies is the most dramatic. Businesses are
expected to purchase almost 30 percent of their products
by 2004, and transactions from E-marketplaces will produce nearly
33 percent of the $2.78 trillion B2B E-commerce total, according to
the Yankee Group. Forrester Research predicts that E-marketplaces
will produce 53 percent of these transactions. The impact of the
is expected to generate more than $6 trillion in trade by 2005,
to Jupiter Communications.
is expected to reach almost $184 billion by 2004, or about 7 percent
of all retail sales, according to Forrester Research. Jupiter
has predicted that by 2005 consumers’ online research will result
in at least $632 billion in sales at traditional storefronts and from
catalogs. Consumer spending for online and Web-influenced offline
purchases, reflecting the momentum of hybrid companies, will exceed
$831 billion in 2005, according to Jupiter.
Traditional storefront and catalog retailers have taken the holiday
online shopping lead over Internet pure-play E-tailers for several
consecutive years, by over 29 percent according to research by
BizRate.com. The bricks channel, for example, has provided an
the sale of more expensive items, like computers and home video
according to a study by San Francisco market research firm King, Brown
The appeal of physical shopping as a form of entertainment,
and exercise has its own time and place, whether one is hunting for
a personal or a business product. And the catalog convenience of
favorite items, marking special pages by folding the corners,
wish lists with kids or coworkers, browsing poolside or on a commuter
bus, also serves its unique purpose.
For regions without mall density, catalogs are more than a convenience
— they’re a lifeline. Will either the store or catalog purchasing
channel be superseded by E-commerce? It no longer appears likely,
and the prophets of gloom are quieting down. Whether buying business
equipment or vacation sportswear, the Internet presents a convenient
tool for comparative shopping through price and product research,
even if the final purchase is sometimes transacted at a company’s
storefront or through a catalog. The companies that take maximum
of multi-channel selling and marketing stand to reap the greatest
rewards, directing customers to their clicks, bricks, and catalogs
while offering specialty items at each venue to keep every component
New Jersey’s Department of Cultural Affairs is holding
a free day-long event to describe the support that the state gives
to artists, art groups, art educators, and those involved in historic
restorations. "On the Road — A Constituent Outreach
takes place on Tuesday, November 27, beginning at 9 a.m. at the
Senior Center. Call 609-292-4485.
At the event the NJ Historical Commission describes its $4.7 million
annual grants program. Grants range in size from under $500 to over
$600,000. and can be used to fund general operating support,
public programs, fellowships, educational initiatives, conservation
of historical materials, media projects, research, publication, and
The NJ Historic Trust also has grant money available. It provides
grants of up to $750,000, loans up to $425,000, and planning grants
of up to $50,000 toward the preservation, restoration, rehabilitation,
and adaptive use of historic buildings, structures, and landscapes.
The New Jersey State Council on the Arts’ grants include program and
project grants, community collaboration grants, and artists’ service
grants. Council representatives explain how to apply for these grants,
and also speak on how to locate artists and arts groups for programs.
Speaking to another resource, this constituent outreach program
a presentation on using New Jersey’s public records and archives.
This session introduces the rich holdings and history research
of the New Jersey State Archives, and the public records technical
services of the Division of Archives and Records Management.
Other sessions on this Constituent Outreach Day include information
on volunteerism, youth and the arts, the New Jersey Museum, and the
New Jersey Commission on American Indian Affairs. The latter ensures
that American Indian communities within New Jersey have full
to develop and preserve their own cultural, educational, social, and
economic welfare as well as contributing to and participating in the
ongoing life and development of the state.
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