By: Steve Outing
The world of local retailing is under attack from cyberspace. National Web retailers are taking away business from local merchants, as a growing number of consumers purchase goods at online-only retailers like book, music and video seller Amazon.com, and the Web sites of established chain retailers like Barnes & Noble, Wal-Mart and Toys-R-Us. As e-commerce grows, traditional brick-and-mortar retailers will find fewer customers walking into their stores, as an increasingly wired populace discovers cheaper prices and convenience with online shopping.
The choice for those retailers who face significant threats from online shopping — especially local book, music and computer stores, and to a lesser extent toy, clothing, flower, consumer electronics, even department stores — is to either bury their heads in the sand and hope online shopping turns out to be a fad and goes away, or join the fray.
Local newspapers, as I suggested in a recent column, have both an obligation and an opportunity to help local retailers compete in a world of online shopping. We’re just now starting to see that realization among publishers, and the Washington Post is on the front lines with an initiative called “Marketplace,” which was just launched at WashingtonPost.com (and also on the Newsweek Web site in a national version of the same online shopping concept; the Washington Post Company owns Newsweek).
Turning readers into revenue
The concept behind Marketplace is twofold. First, the program brings e-commerce to the pages of the Post and Newsweek Web sites, since a major part of Marketplace is contextual e-commerce links scattered throughout the sites’ editorial content. Post executives describe this as an effort to convert the sizable traffic to their editorial content into revenue, as Web readers click on contextual e-commerce links and get out their credit cards — to buy a Super Bowl commemorative football from a sporting goods store after reading Post Super Bowl coverage, for example, or a CD after reading a music review.
Secondly, it is being built in order to allow local retailers to compete in the online space with the large national Web retailers that exist today and that are being developed in large numbers. The local music store, for example, when the Marketplace concept is fully built out, will be positioned on the Post Web site to compete for an online sale with the likes of Amazon.com and CDNow, two major national online sites that sell music.
According to Paul Pappajohn, vice president of development and e-commerce for Washington Post/Newsweek Interactive, local retailers participating in the program will be positioned in the Web site such that online shoppers will be able to do comparison shopping online to find the best price. Also, the contextual e-commerce links to local retailers will be positioned in appropriate places throughout the site (clearly labeled as advertising so Web users don’t confuse it with editorial content). The contextual links are not on the site today (except in the books area), but should be in the coming weeks.
The core Marketplace comparison shopping service (the non-contextual, stand-alone service) is separated into 11 categories — books, computer hardware, computer software, consumer electronics, fashion, gifts, movies & videos, music, office supplies, outdoor & sporting goods, and toys. Look in the books section, and you get a search field and a list of local bookstores that have Web sites on the WashingtonPost.com Yellow Pages directory. When you run a search for John Grisham’s latest book, you get back a list of vendors that carry it, along with prices and a “Buy It!” link. At this early stage, most of the actual item pricing is from national retailers, but this will change as more local retailers start selling online, too.
As online commerce grows in consumer popularity, it’s increasingly important for local retailers to participate in the online shopping experience — even if they currently are “technology impaired.” A typical consumer on the hunt for a particular product is likely in the future to look first to the Web, for product information and reviews, and to find pricing information. It’s vital for a local retail store to be positioned in the online space so that those consumers know that the retailer carries the product being sought — and ideally so that the product can be purchased online as well as in the local store.
Pappajohn says the intent behind Marketplace is to give Post online readers a single stop for product information, pricing and purchase. They don’t need to visit multiple Web sites to comparison shop, and local merchants are as easy to gather information from and buy from as national Web retailers. The second intent, tied in with the first, is to provide local retailers — many of whom don’t even use computers, let alone support sophisticated Web sites — with the ability to sell to online customers. The idea is that the Post will provide the necessary technology and online venue to get their transactions online. This isn’t implemented yet, but is in the Marketplace long-range plan.
Marketplace is still in its infancy, and initially the service will support direct comparison of selected merchants’ product pricing. At some as-yet undetermined time, Pappajohn expects the service to integrate pricing from local merchants and national Web retailers; for now, a consumer looking for the best price on the latest John Grisham novel will still have to check with Amazon.com and Barnesandnoble.com in addition to comparison shopping among those booksellers who might be on Marketplace.
The Marketplace strategy certainly is designed to assist local retailers adopt to the cyber age. It’s in the Post’s best interest, obviously, to do what it can to help the local retail community survive and prosper, so that retail advertising to support the core newspaper doesn’t degrade as a result of non-local cyber-retailing competition. But it’s also an outstanding online business opportunity over the long term, Pappajohn suggests, and a way to turn editorial readers into a revenue source for the site.
The Marketplace comparison shopping service is integrated into other components of the Washington Post site, such as the CitySearch-powered Yellow Pages directory service, classified advertising, and throughout the site as contextual links. Pappajohn explains that the local merchants who have bought enhanced business listings in the local online Yellow Pages service in the future might be sold packages of services that include e-commerce capabilities for their businesses. Every business that’s bought a spot in the business directory service has been integrated into Marketplace, so that a consumer searching for music will see a link to a local music store’s Yellow Pages enhanced listing even if that business doesn’t yet participate in online sales.
>From the consumer standpoint, the advantage to the overall Post concept is that integration of the various components of the paper’s Web site makes it so that the online shopping experience can be done in one place. For example, a consumer might enter the Post Web site via its classified ads, then move over to the comparison shopping service where price research and a purchase is executed.
Enabling online sales for local retailers, a future offering, is the type of service that would be difficult for local retailers to execute themselves, and it would provide them with added value for the money they spend for their online sites within WashingtonPost.com’s Yellow Pages directory. And, the theory goes, it will make selling enhanced listings for the directory service easier. Pappajohn says that the Post also will concentrate on selling packages of services to retailers that combine print and online promotion along with e-commerce capabilities, leveraging the newspaper’s advantages over online-only competitors operating in the same market space.
Pappajohn says that retailers have expressed strong interest in the e-commerce concept, and he has not yet experienced any dissension from retailers who might feel threatened by the whole concept of e-commerce eating into their traditional businesses. When local retailers look at the business being done by Amazon.com, et al, they see the large potential impact on their businesses, he says. “So anything we can do to help them gain (online) prominence, they’re definitely open to exploring. … They (local retailers) are looking for us to lead them to water, in a sense.”
He believes the Marketplace local e-commerce concept can play well at small newspapers as well as large ones like the Post. The key for smaller publishers is to work within alliances to create such programs, just as Classified Ventures combines the resources of many newspaper companies to compete against online giants in the classified advertising space.
And the technology to support e-commerce for a publisher’s local retailers can easily be had, Pappajohn points out. The Post is working with Junglee as its technology vendor on the Marketplace comparison shopping project. California-based Junglee is a provider of advanced Web-based virtual database technology for online commerce applications. Ironically, Junglee is now owned by Amazon.com, which purchased it in August, putting the online retailer in a position where its subsidiary, Junglee, is helping local retailers compete against Amazon.com.
Something to work on
Is the Washington Post on to something important here? Absolutely. E-commerce well may be the single most important area on which news site publishers should concentrate in the coming year. It’s also the area of the online publishing environment that holds perhaps the best potential for making news Web sites profitable. To date, only a few news sites are taking it as seriously as is the Post.
Says online news consultant Mark Potts, who is a principal player in the Marketplace initiative, “If 1998’s buzzword was ‘portal,’ then 1999’s buzzword is going to be ‘e-commerce.'”
Contacts: Paul Pappajohn, email@example.com
Mark Potts, firstname.lastname@example.org
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This column is written by Steve Outing for Editor & Publisher Interactive. Tips, letters and feedback can be sent to Steve at email@example.com