By Clare Saliba E-Commerce Times
11/29/00 10:55 AM PT
E-tailers are failing to target potential customers over age 35.
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Although many Internet firms are slashing advertising budgets
in favor of direct marketing campaigns, a new study released Wednesday
by Andersen Consulting and Online Insight warns that e-tailers
often miss the mark when it comes to marketing initiatives.
"Companies are ignoring the basic marketing principles
traditional business use -- first, choose your
target more deliberately, and then focus marketing efforts to reach them,"
said Andersen Consulting e-branding partner Stephen Dull.
Dull added, "Instead, many
companies are spending a lot of money on sweeping Internet marketing
initiatives and huge advertising buys that are not targeted."
Heavy Spenders
The report, "Beyond the Blur: Correcting the Vision of Internet
Brands," surveyed the Internet marketing spending landscape and found that
online business-to-commerce (B2C) ventures should forgo flashy attempts to
pull in young and trendy customers, and instead focus their attention on
consumers over the age of 35.
According to researchers, the over-35 demographic includes
"heavyweight spenders" who account for 70 percent of all online spending and
represent the most profitable consumer sector. Internet companies that
redirect their energies toward attracting them could realize "dramatic
returns," the study said.
"Success is not achieved by throwing around as much money as possible," Dull
added, "but by inspiring customers to buy more."
Motivators
While many e-tailers strive to undercut competitors by offering the lowest
prices on goods, the report found that cost is not necessarily a critical
factor in motivating customers to purchase from a particular site.
In fact, pricing contributes no more than 10 percent to e-brand value, it
said. Instead, online customers are more interested in Web site speed, ease
of use, security and overall selection of products. Researchers advised
online vendors to concentrate on bettering the consumer experience in order
to boost the bottom line.
"The secret to building brand equity is not so much in huge advertising
buys, fancy logos or constant price-slashing," said Dull. "It's in fully
understanding customers' needs and providing them with an exceptional
experience tailored to those needs."
Sticky Notes
The study also noted that improving a customer's online shopping experience
is the best method to build a sticky and known brand name.
Although company logos, product packaging and images are usually thought of
as representative of a brand, researchers said they only incrementally
increase an online company's success on the Internet.
"A brand should be defined as the sum total of a customer's experience with,
and perceptions of, a product or service," said Online Insight president Ken
Forster.
About the Study
As part of the study, researchers surveyed more than 2,000 online consumers
who purchased from B2C sites across 17 different industries.
Respondents were also questioned on a variety of issues regarding Internet
usage, brand awareness, knowledge of pricing and product information, and
customer service .