Traditional retailers can thrive in online world

The honeymoon's over. So it appears, anyway, for the countless upstart "e-tailers" that have staked out their territory in the dot-com realm over the past several years. Recent studies have warned of an impending shake-out that will see many online retailers...

The honeymoon’s over. So it appears, anyway, for the countless upstart "e-tailers" that have staked out their territory in the dot-com realm over the past several years. Recent studies have warned of an impending shake-out that will see many online retailers close their virtual doors for good. And April’s technology-stock meltdown on Wall Street didn’t exactly bode well for the future of this particular business.

Still, it’s not quite a total doomsday scenario. Internet retail still has a promising future, experts say – but its standard-bearers, ironically, may turn out to be established players from the good old-fashioned bricks-and-mortar retail world.

"I think the big hype for the first wave of online e-tailers is over," says Beat Richert, principal of Montreal-based 2B Interactive Communication Marketing.

Web-based retail operations like CDNow may enjoy the advantage of having got there first, he says, but the average consumer is still loyal to traditional retail brands. So those real-world retailers with a foothold in the dot-com realm now should be well-positioned to thrive in the future.

Traditional retailers are going to win on the Web, affirms Roman Bodnarchuk, president and CEO of Toronto-based N5R – but only if they get their act together now.

Even if they’re not ready to begin selling product online, Bodnarchuk says, they should be laying the groundwork for e-commerce by building their databases and establishing the means to communicate with customers via e-mail. Some U.S. retailers, he notes, have begun asking shoppers in-store to provide e-mail addresses, with precisely this objective in mind.

The challenge for bricks-and-mortar retailers is to figure out just how to use the Web most effectively, says Doug Keeley, president of Toronto-based ICE Integrated Communications & Entertainment. The secret, he argues, is to offer something of value that gives users a reason to keep coming back.

Transition to the Web can prove a slow and difficult process, says Cara Vogl, marketing manager with Mont Royal, Que.-based Le Chateau, which is currently in the midst of efforts to leverage its well-established brand online. The popular clothing retailer launched its Web site last June, and has recently rolled out a revamped version (

"You want to catch up to what everyone else is doing – but if you go too quickly, you’re putting yourself in a potentially very dangerous position," she says. "So we’re taking baby steps."

Rushing to establish an e-commerce capability isn’t necessarily the way to go, adds Darrell Heaps, partner with Nkaos, the Toronto-based Web developer responsible for the Le Chateau site.

Rather, he argues, the key to long-term success is to create a rich user experience, through a focus on building "communities" online.

The original Le Chateau site, for example, succeeded in attracting 11,000 users per month, despite the fact that it sold no merchandise. What it did have to offer was a variety of community-building features, including message boards and random mini-surveys designed to provide entertainment value while helping the retailer collect user data.

While not necessarily product-oriented, Heaps says, features like these go a long way toward adding what Web developers call "sticky value" to a site – that is, the ability to attract and hold users.

"The amount of return traffic and brand loyalty that’s being built is massive," he says.

The new Le Chateau site will be more product-oriented, to help the retailer begin to ease into e-commerce. Having devoted effort up front to building community, Le Chateau now believes it has a large audience primed and ready to purchase its products online.

"As we get ready to launch e-commerce capability…what we’ll be doing is deploying it to a captive audience," says Heaps. "The audience is essentially waiting to be sold to."

Also in this report:

- Harry gets hip with casual campaign: Upscale retailer makes a play for younger, "new economy" business executives p.24

- POP progress slow but sure: With the promise of credible data, point-of-purchase is poised to prove its worth as a medium p.25

- Interactive merchandising on the rise: Just one of several trends apparent at GlobalShop 2000 show in Chicago p.25

- North West Co. nurtures roots: Retailer supports local activities in remote communities throughout the north p.27

In Brief: The Garden picks CDs to take on daily creative leadership

Plus, Naked names two new leaders of its own and Digital Ethos comes to Canada.

The Garden promotes two creative directors

ACDs Lindsay Eady and Francheska Galloway-Davis have taken over responsibility for day-to-day creative leadership at The Garden after being promoted to creative director roles.

The pair will also help develop the agency’s creative talent, formalizing mentorship and leadership activities they have been doing since joining the agency four and three years ago, respectively. In addition to creating the agency’s internship program, the pair have worked on campaigns for Coinsquare, FitTrack and “The Coke Challenge” campaign for DanceSafe.

Eady and Galloway-Davis will continue to report to The Garden’s co-founder and chief creative officer Shane Ogilvie, who is stepping back from daily creative duties to a more high-level strategic role, allowing him to focus on client relationships and business growth.

Naked Creative Consultancy names new creative and strategy leadership

Toronto’s Naked Creative Consultancy has hired Yasmin Sahni as its new creative director. She is taking over creative leadership from David Kenyon, who has been in the role for 10 years and is moving into a new role as director of strategy, leading the discipline at the agency.

Sahni is coming off of three years as VP and ECD at GTB’s Toronto office, where she managed all the retail, social and service creative for Ford Canada. She previously managed both Vice Media and Vice’s in-house ad agency Virtue.

Peter Shier, president of Naked, says Sahni’s hiring adds to its creative bench and capabilities, as well as a track record of mentorship, a priority for the company. Meanwhile, Kenyon’s move to the strategy side, he says, makes sense because of his deep knowledge of its clients, which have included Ancestry and The Globe and Mail.

Digital Ethos opens a Toronto office

U.K. digital agency Digital Ethos is pursuing new growth opportunities in North America by opening a new office in Toronto.

Though it didn’t disclose them, the agency has begun serving a number of North American clients, and CEO/founder Luke Tobin says the “time was right to invest in a more formal and actual presence in the area.” whose services include design, SEO, pay-per-click, social media, influencer and PR,

This year, the agency’s growth has also allowed it to open an office in Hamburg, Germany, though it also has remote staff working in countries around the world.

Moray Hickes was the company’s first North American hire as VP of sales, tasked with business development in the region.