Online Retailers Find Success with Print Ads

Digital/Online

A study conducted by researchers from the Wharton School looked at online retailers and the challenges they face -- having an unlimited geographical selling area -- in identifying, targeting, and getting noticed by potential customers.
 
A key finding of the study, What Matters Most In Internet Retailing: “Different neighborhoods have different characteristics, which in turn lend themselves to different customer acquisition strategies.”
 
Examining the success of online and offline marketing methods used to drive traffic to online retailer Diaper.com, the researchers examined two different areas of the country:

In the greater Chicago area, Cook County, Illinois (which contains 163 ZIP codes), the most successful method of customer acquisition was print advertising.
 
Conversely, in Los Angeles County, California (with 289 ZIP codes), the most effective method was offline word of mouth.

Source: MIT Sloan Management Review, What Matters Most In Internet Retailing

As reported by Print Power, the researchers found, “the most successful way of attracting consumers to the website depended on the physical density of consumers; a higher density implied more powerful word of mouth as the proximity of consumers amplified the possibility of interaction. Print advertising tends to work best in less dense environments where customers have less opportunities for contacts.”
 
Online word of mouth and online search appear to generate new customers proportional to the total number of potential customers in a given location.
 
Interestingly, online search and online word of mouth (social media, blogs) was not among the top three methods of acquiring new customers in the either of the two regions.

The researchers concluded, “Though it is clear that technology-enabled acquisition methods are important, the authors contend that traditional methods of customer acquisition remain vital even in the Internet retail economy.”