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The marriage of online couponing and supermarket loyalty programs is spawning a boom in Internet deal delivery that's reinforcing consumers' attachment to brick-and-mortar stores rather than pushing them toward virtual retailers. Could e-mail spell the beginning of the end for FSIs?
PREDICTIONS OF TECHNOLOGICAL revolution whose byproducts include bankrupting some large, traditional business have been a hallmark of the industrial age and a particular fixture of American culture since the end of World War II, when the conquest of the atom made anything seem possible. But by and large, the predictions of those Fifties Popular Science reels were either sheer fantasy-we're still waiting for the flying cars-or had darker consequences than anyone foresaw. Tireless robots never did free Mom from the drudgery of household chores, but they did liberate thousands upon thousands of factory workers from their paychecks.
In a similar vein, predictions of brick-and-mortar retailers' demise-buried, of course, by the virtual shovels of the Internet-have been greatly exaggerated. But that isn't to say that the Net won't have any effect on traditional retailing, just that its effect, like that of robotics, will be far different than originally conceived. These few years into the online experiment, what's emerging is a combination of opportunities and threats not directly related to sales (people shopping for groceries online versus visiting stores) but to grocers' relationships with both customers and manufacturers.
"There's more people that shop online than buy online," says Bob Smithers, vice president and general manager of MossWarner, a Hartford, Conn.-based consulting firm specializing in Internet marketing. "They do research and make purchase decisions online, but they don't actually buy. I think that will be an ongoing trend."
That opinion is borne out by the experience of Dick's Supermarkets, the eight-store chain in southwestern Wisconsin that has been among the most aggressive Internet grocery marketers, both operating its own Web site and participating in Internet marketing programs offered by both Relationship Marketing Group (RMG) and planetU.
"We see quite a few contacts from business computers," says Ken Robb, senior vice president of marketing. "[People at work] visit the site on their lunch hour, pick up Upons [offered by planetU and pronounced YOUpons] and promotions, check their RMG shopping list, check the recipe of the week;...