Roboshop

The internet enables companies to really understand their customers – from their choice of claret to their taste in bars.  This time, it’s personal, says Patrick Schmitt

PICTURE A SHOP assistant with a perfect memory, who works 24 hours a day, 365 days a year and knows your name, address and penchant for aquavits at Christmas.  Hard isn’t it? Or, on the other hand, imagine your local landlord.

It’s not just your "usual" he remembers, but where it’s brewed, by who, and using what.  He also knows your birthday and offers you free drinks on the day. Disturbed? You probably would be. Impressed? Certainly.

But that’s the net for you – a vast store of information, not just about products and places but also about the consumer.  And increasingly, retailers, bars, brewers, distillers and vintners are gathering details about their customers to more accurately target their wares.

Nevertheless, the consumer hasn’t lost all control, he can manage what he’s told and when, while new legislation aims to reduce unwanted mail.  Also, it’s still possible to "opt in" or "opt out" when it comes to receiving information.

Of course, the website owner has got to get you to visit the site in the first place, which in many ways is the hardest hurdle.  But there are methods to entice the "surfer" and they involve a mixture of clever site design – or "search engine optimisation" as it’s known – as well as advertising, both on- and off-line.

And when it comes to search engines, "there are only five that really matter", according to Alex Murray, Berry Bros & Rudd’s internet shop manager.  "Google, MSN, Yahoo, Overture and Excite," although he admits Lycos is also important.

As for advertising, pay per click is growing in popularity – where the advertiser is only charged if someone actually chooses the link – while some even use pay per acquisition. On the other hand, the most common approach is pay per thousand, where people fork out for ad impressions.

These can take the form of banner ads, pop-ups (small ads superimposed on the screen) and the most annoying, pop-overs (superimposed ads that fill the entire screen). However, the more creative the imagery the less irritating it is, and some pop-ups can actually be quite enticing.  Not convinced?  Have a look at www.eyeblaster.com for some clever solutions.

Viral marketing is another technique, often considered unsuitable for wine websites as it can involve games, music or jokes which although act as incentives for people to look at the website and pass on the link, tend to be for a younger audience than might be buying wine on-line.

However, the method can be very powerful for spirits brands, and features such as Bacardi’s on-line mixing deck are effective as people enter the site, play with it and then send the information on to a friend.

Off-line advertising is also important. For example, Booths, which boasts two websites – booths-wine.co.uk and everywine.co.uk – have promoted the sites in-store, as well as on specialist wine sites, while Oddbins.com is branded using the sides of 38 tonne lorries.

The Waitrose wine site is publicised using posters, press and direct mail as well as "promotions on portals such as AOL and affiliate programmes," according to Peter Burns, marketing manager, internet and ecommerce.

A particularly clever off-line technique is employed by La Fée Absinthe, which has devised a tab which you break off the back label, leaving an identical one beneath. On the back of the removed section is a reference code for gaining access to www.eabsinthe.com.

"The removed part acts as a unique portal into the website," as George Rowley, director of BBH Spirits comments.  But, while you may get people to look at your site, you need to collect their e-mail addresses before direct e-mail marketing can begin.

Of course one can buy a database, but e-mailing millions of hotmail accounts is hardly a targeted approach.  So, for La Fée that reference code doesn’t just get you into the site but gives you a 40% discount on an Absinthe spoon, which if you order not only gives "us an opportunity to monitor who’s buying our product," according to Rowley, but also a list of e-mail addresses for direct marketing.

And there are many other approaches.  Oddbins.com, for instance, like many, runs competitions each month, which you must register to enter – "a good way to bring in new e-mail addresses", according to Sam Richardson, the retailer’s on-line marketing manager.

Then, of course, one can entice with content, whereby certain information is only accessible if you register.  This could be anything from articles to games.

However, with most websites e-mails are collected if someone chooses to purchase on-line, and this means the site must be attractive and easy to operate or else it’s likely they will buy elsewhere.

It’s once you’ve got people’s personal addresses that things get interesting. In particular, Matthew Luxon, CEO of Hildebrand – a company specialising in delivering brands using a mix of media, especially the web – is excited by the potential for bars, which he believes "need to brand themselves as the numbers rise".

And he thinks they "should use a digital medium because bars don’t have many ways to communicate with their client base, unlike drinks who use TV and print advertising". Plus, "their demographic is so suited to the media".

And it means bars "can deliver the brand when people aren’t there, build a community around the brand", he adds.  This could be just as effective for the local boozer as a chain or club believes Luxon.

"Think of the chalk-board outside during a happy hour," he suggests, "how can you get beyond it?" Well, not only could you remind people of offers, but you could hold a pub quiz – "Why not submit the questions on-line?" he questions – while you could register birthdays, and send vouchers for free drinks on the day. "It’s a low cost medium once it’s up and running," Luxon argues.

Of course, this might not quite be in the spirit of Berry Bros or Booths’ attempts to keep customers returning, but the ideas can easily be tweaked to suit the customer base. Oddbins tries to retain customers by e-mailing them twice a month – the "first one is an offer and the second is product-led, for instance the latest wines", according to Richardson.

Similarly, Berry Bros, among others, e-mail newsletters which include discounts and outlines of stories that can be followed up on the site.  Of course, if too much information is listed on the e-mail there is little incentive to actually log on and visit the website.

Also, send them too often and they are in danger of becoming an irritant.  But there’s a more advanced form of e-mail marketing many are embarking on. It involves personalising the offer and information according to who receives it, something that can only be done economically by using the web.

"The key advantage of being on-line – and something you can’t do off-line – is segment people into smaller groups," says Rowan  Gormley, CEO of Virgin Wine Online.  "If you did a direct mail for one million people," he explains, "the economies of scale would be good for the print-run. 

But then you break it up because some people prefer red wine, then there are six different price points, then New and Old World, then some want to stick to what they know, others want new stuff, then some want one of 12 [bottles], others 12 of one, or six of two and so on and you end up with about 50 permutations leading to lots of smaller groups.

And to mail these would cost a lot more money.  "But," Gormley continues, "on-line, you build up a set of rules which allow you to segment and there is no limit to how precisely you target."  And if you’re wondering how this works, in most cases it involves tracking customers’ past choices.

So, as Richardson says: "If someone is mainly interested in top claret there is no need to e-mail them about an Aussie plonk deal." Interestingly, Virgin is yet to find a cut-off point because "every time we segment again we get an uplift", says Gormley.

However, Murray remains unconvinced by the method, especially if the segmentation is enacted according to past purchasing habits. "Just because someone buys red Bordeaux doesn’t mean they’re not interested in white Burgundy," he says, "and while you can personalise to the n-th degree it will cost you money."

But, the process isn’t just about tracking habits and then using some form of programmed algorithm to decide what a customer might be interested in.  No, the consumer does have some say in the information they receive.

Known as a customer managed relationship (as opposed to customer relationship management), one example comes from oddbins.com which has begun a service in which users sign up and tell the company particular areas of appeal.

"So if a new wine fits their interest we e-mail them.  They can also specify how often they want to receive the information," says Richardson. And similarly, Virgin sends out e-mails checking visitors are receiving the right information because "they could have bought a case of claret for their father-in-law suggesting, incorrectly, they are a claret drinker", exemplifies Gormley.

However, as effective as this marketing is, there is some issue over sending out the e-mails. As Richardson clearly states: "People may give their e-mail address but it is up to them whether they receive an e-mail from us."

This will become increasingly important from December, when the Data Protection Act is updated. After this, according to Luxon, companies will have to ensure existing customers receiving e-mails have given past permission while firms must have appropriate consent before contacting consumers.

This means anyone involved in email marketing will have to go back through their database and check they have a record of consent being given.  Also, companies will soon have to state who’s collecting the data and what they are going to do with it.

As Luxon also warns: "The opt in agreement will have to be kept on record and any information collected that’s not related to a purchase must be optional and clearly explained to the customer."

Nevertheless, whatever the changes to the law, e-mail marketing, as well as on-line branding, is here to stay. It’s just too effective to abandon. And it’s targeted, scaleable, fast and economic. Furthermore, the response is easy to measure, which is a common problem with other forms of marketing.

However, whatever your skills at promotion, a loyal customer base is most effectively built if "the customer experience is really good", according to Murray.  And it’s interesting to note "the biggest web brands are pure web ones, for instance Friends Reunited or lastminute.com", according to Luxon.

"They are effective because their business model is entirely based on the web," he explains.  So, in other words, while you can closely control the user experience on-line, in the real world it’s less easy.

Murray may have made sure bbr.com is fast, informative and simple to use, but service in Berry Bros’ St James’s cellar will never be as quick, or as targeted.  Or rather, that perfect shop assistant or know-all landlord doesn’t exist – making it hard to have an identical brand image both on- and off-line.