ON-LINE REMINDERS: WHAT’S IN STORE

Byline: Valerie Seckler

NEW YORK — Within 10 years, say experts, shoppers will routinely be reminded by on-line computer programs that it’s time to purchase items ranging from wedding gowns and graduation gifts to groceries, lawn care and auto maintenance.
“We are probably five to seven years away from the everyday use of interactive marketing,” projected Drew Ianni, on-line advertising analyst at Jupiter Communications, a consumer-interactivity market research firm.
Jupiter is estimating electronic commerce (or e-commerce, as it has come to be known) will expand to $37.5 billion in 2002, a more than sixfold increase from the $5.8 billion Jupiter is anticipating for 1998.
“We expect the market to grow quite aggressively over the next several years,” Ianni said. “We’re forecasting that by 2002, about 25 percent of the U.S. population will be shopping on line.”
Meanwhile, at technology consultant Gartner Group, research analyst Mike Bernstein projected interactive marketing will achieve “full penetration” of the U.S. in about 10 years.
“By the end of 1999, this will be something that aggressive users are already sick of,” Bernstein contended. “A lot of these pitches will be bandwidth-intensive, with super sound and high-resolution graphics. It will take some time for the technology to catch up.”
A recent entry into this burgeoning electronic arena is MinderSoft, an interactive marketing firm founded by Stephen R. Chapin Jr., its president and chief executive officer.
The 35-year-old entrepreneur has created a software program to target marketing at individual shoppers, based on his belief that retailers need to appeal to customers one by one, to capture a greater share of market.
It’s a view held by a growing number of industry observers and one that has sparked some Web merchants to develop personal profiles of individual customers so they can use the data to remind those consumers to consider purchasing, say, the latest CD by their favorite musician, or new maternity clothing as a pregnancy progresses.
Electronic retailers, or e-tailers, leveraging personal databases include general merchandiser iqvc.com; booksellers such as amazon.com and barnesandnoble.com; and music retailers, like cdnow.com and musicblvd.com.
Chapin’s idea is to provide this service for retailers, with software designed to collect data from users.
“Our software asks what a retailer’s customers really want for help in various parts of their lives,” Chapin said of MinderSoft’s Personal Minder program. “We can tell those shoppers what to do, how and when to do it and how much it will cost.
“The program is based on customers’ needs; it is not technologically driven,” Chapin emphasized, pointing out that his focus is to help retailers realize more business from existing customers, as well as to attract new ones.
The software enables MinderSoft to obtain data from on-line shoppers, with their permission, through a survey taken at a merchant’s site on the Internet or America Online. Based on the responses, MinderSoft develops and delivers customer profiles to the participating e-tailer.
Armed with these databases, merchants can make timely suggestions to consumers about purchasing things, according to the needs those users specified in the survey, called a Personal Minder.
Shoppers receive the reminders — say, to buy a wedding present, or to stock up on pet food — when they go on line, and choose which of three ways they wish to be prompted: a flash bar or a pop-up box on their monitor, or e-mail.
The software can be installed via disc or be downloaded into consumers’ computers and is free to those users. The cost of implementing the program, which Chapin declined to specify, is borne by the retailers who use the interactive tool.
Discs housing the software are offered at the point of sale in participating stores and also are inserted in books bought at Barnes & Noble’s Web site.
MinderSoft has a half-dozen clients, and Chapin said he is “close to adding five more.” In addition to Barnes & Noble, the roster currently boasts Blockbuster Entertainment, Toys ‘R’ Us, Jiffy Lube, Lowe’s and Kimberly-Clark Huggies.
“We’re trying to hook a category-dominant retailer in each part of a consumer’s life,” Chapin noted.
A shopper visiting a Web site equipped with the Personal Minder software is shown a click-on box, which asks if the user wants a Personal Minder and explains that it will provide reminders about holidays and personal events, such as weddings, birthdays and graduations.
Basic data collected includes name, address, phone and fax numbers and e-mail address.
Users also are asked what they want the Personal Minder to do for them. They respond by selecting up to four categories: holidays throughout the year, personal year, diamond and gift-giving tips and one’s alma mater.
Further, an e-tailer can work with MinderSoft to develop a profile tailored to its goods and services. A Pet Minder, for example, would remind the user to make an annual appointment with a veterinarian, while a Home Minder would advise when it’s time to plant flowers and shrubs.
“We can tell users when to fertilize and plant, customized by ZIP code,” Chapin said.
In addition, the information can be used to enhance other marketing efforts. Toys ‘R’ Us is using Personal Minder data to more precisely target direct marketing via the U.S. Postal Service, Chapin noted.
Currently under consideration are a Wedding Minder and a Fashion Minder.
“We expect to develop the programs by September,” Chapin said. “We will approach retailers with big [bridal] registries. We got several e-mails from users asking for a Wedding Minder.”
While apparel continues to be one of the tougher things to sell on line, Ianni sees substantial growth for the category over the next four years. According to Jupiter’s analysis, on-line apparel purchases will total around $71 million this year, leap sixfold to $443 million in 2000 and jump to $1.93 billion in 2002.
By 2002, about 18 percent of on-line consumers will be buying some apparel electronically, compared with just 1.1 percent last year, according to Jupiter’s research.
For his part, Chapin came up with the idea of developing personal profiles of on-line shoppers in 1995, when he was doing database marketing for management consultant McKinsey & Co. A year later, he launched MinderSoft, with headquarters in Herndon, Va., near his hometown of Baltimore.
“In the last six months, there has been a sea change in retail’s point of view on the Internet,” Chapin said. “The executives I talk to are getting the message that we can gather and deliver personal information on their customers and help build their sales.”
MinderSoft’s financial backers apparently are hopeful as well: three Baltimore-based investment banks recently gave it another cash infusion, Chapin said, raising the total investment in the company to $2.2 million. The figure includes some of Chapin’s own funds.
“That’s a significant up-front investment of venture capital,” he offered, “but we’re expecting to turn a profit within the next six months.”
What’s more, observed Gartner’s Bernstein, “interactive marketing enables retailers to identify and focus on their most profitable customers — but first, they have to collect data on their customers.”
“This is something a lot of companies fail to do, in many industries,” Bernstein continued. “Retailing is changing from a creative way to market, based on product, to a very scientific process based on consumer behavior.”
Chapin estimated MinderSoft will have about one million users by yearend. By comparison, America Online, the largest, paid on-line service, has about 10 million users, he said.
Roughly 53 million Americans will be on line at yearend, according to Jupiter’s projections, a figure it expects to increase to 87 million in 2000, and 116 million in 2002.
Asked of MinderSoft’s growth plan, Chapin said, “Within the next six to 12 months, we’ll either form a strategic relationship with a company like a Disney or a Washington Post or a Cendant, or look into raising capital in an IPO.”

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