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Copyright
Archives & Museum Informatics
2000

Selling More Without Selling Out: Museum Merchandising That Supports a Museumís Mission

Dean Johnson, MuseumCompany.com, USA

Abstract

This paper discusses how a museum can partner with an established commercial entity to use more effectively the Internet to reach the museumís constituency, establish a professional Internet presence, increase merchandise sales, simplify museum gift shop operations, and more proficiently use scarce capital resources.

Museums have Internet sites that range from modest translations of their brochures to award-winning multimedia presentations. However, Internet funding and the talent to develop Web sites are both scarce. Partnering with an established, reputable commercial entity to develop a professional Internet presence while simultaneously enjoying the benefits of increased cyber gift shop traffic is a powerful combination. This concept is made even more attractive because it can be done at no additional cost to the museum and will result in substantial cost savings.

In summary, such a partnership can (i) achieve better member outreach through a professional Internet presence and analysis of member purchasing behavior, (ii) dramatically improve onsite and Internet museum shop operations by reducing onsite inventory, providing additional Internet product opportunities and offering one-stop fulfillment, and (iv) reduce the financial commitment to shop inventory while developing additional revenue sources.

For those of you who have only recently begun to research, correspond, and shop online, perhaps the most annoying thing about Web culture is that it frequently advertises itself as a first in all areas. Listening to some people talk, you might get the impression that only now are art and technology exploring the benefits of partnering with each other for mutual advantage. But the wedding of art and technology is, of course, not as recent a development as one might suspect. Consider this: in the final years of the 19th century, Louis Comfort Tiffany joined forces with Thomas Edison to create a design for the first moving picture theater. Thanks to both Tiffanyís impeccable sense of craftsmanship and Edisonís genius for invention, the silver screen has changed world culture beyond even their wildest dreams.

In many ways, then, the partnering of art and technology in the realm of cyberspace is more accurately a continuation of this rich tradition. The major portion of my talk today is aimed at examining the potential, that is, the future of what such a partnering can mean for museums and e-commerce. But in order to understand such a unionóand certainly in order to realize its full potentialóitís important to note the larger historical context in which art and technology have helped to create some of the most innovative, surprising, andówe hopeóengaging aspects of the Information culture.

My purpose here is to present to you some of the tangible, proven ways in which e-commerce and museums can continue this tradition of interplay. I will focus specifically on how Web retailers and museums such as those that are represented here at the conference can do business thatís not only mutually profitable, but that also honors the missions and constituencies of all parties involved, which is what I mean with my title, "Selling more without selling out." When we know more of what our present options are, the decisions we make about the future become all the more exciting.

All hyperbole aside, the growth of Internet traffic is astounding, escalating as it does every few months. And with it comes huge increases in e-commerce. Recent industry reports put online consumer spending during the '99 holiday season at nearly four times the rate of the previous year. Why? At the risk of oversimplification, itís this: as the processes behind e-commerce continue to be refined, consumers feel more confident about online spending because they are seeing much wider, more appealing selections of products and services, they see content-rich sites that present up-to-the minute information about a wide spectrum of topics and issues, and, finally, they receive faster, more attentive customer service than ever before on the Web.

Yet, for the all the progress being made to reach their various constituencies on the Web, many groups working alone do not have adequate resources or time to devote to establishing a professional Internet presence. For museums in particular, the challenges are unique and must be recognized as such. Typically, retailers of computers, digital cameras, and other technology products amass various brands, run specials, and blast hundreds or perhaps thousands of other sites with their banner and "pop-up" ads in hopes of driving revenue. But if museums were to adopt similar strategies, they would stand to alienate their members. Generally speaking, museums seek to raise public awareness of art and artifacts, stimulate interest in events, and collaborate with a variety of other groups to enrich community life. How and where does e-commerce fit with this kind of mission?

Lest my message be misconstrued, though, let me clarify one point: I have nothing against purveyors of technology hardware. Thanks to their presence on the Web, I was able to purchase the laptop on which I wrote and revised this paper. Furthermore, the company I represent relies on the latest digital technology to produce crisp, state-of-the-art imaging for the products we feature on our site. But the technology products did not attract me because they were exclusives made by a computer artisan or because they were faithful reproductions of older, more famous computers or cameras.

As I said earlier, museums face unique challenges in reaching their audiences, disseminating information in a timely, cost-effective way, increasing merchandise sales, simplifying museum gift operations, and using often scarce capital resources more efficiently. These goals, of course, apply equally to the worlds of the Internet and traditional brick-and-mortar stores. Yet the speed and ever-increasing traffic on the Web up the ante even more. That museums trade in product is hardly news to any of you, but what it takes for them to sell effectively online and to use the Internet to its fullest has not been an easy path to pursue. Some museums have Internet sites that range from modest translations of their brochures to award-winning multimedia presentations. But by and large, museums do not have limitless resources for developing software programs, hiring costly outside web design firms, or creating scale economies in fulfillment, promotion, and merchandising. And why should they? As any successful organization knows, if you over-extend, losing sight of your mission and what you do well, then you stand to lose everything.

This is where the concept of partnering art and technology becomes not simply an interesting approach but one of vital importance to museums of all kinds. In collaboration with an established, reputable commercial entity, museums can work much more effectively to create a professional Internet presence, enlarge their member outreach, and enjoy the benefits of increased Web gift shop traffic. Museums that forge such alliances excel because they now have the resources to pursue more expansive goals while not losing their focus on what they do best. Rather than devoting limited humanpower and funds to managing Web merchandising, partnered museums now have access to the resources of an e-commerce entity whose business it is to develop sophisticated software, hire designers, and present valuable content in a format that complements the museumís mission. Working closely with its museum partner, the online entity can provide the kind of professional, full-time Web management that heretofore has been beyond the financial reach of most museums.

Another area in which partnered museums stand to reap significant gains is in the management of their merchandising operations. Since merchandising per se is usually an auxiliary activity to the museumís main mission, the issues of product development, product selection, cross-selling, and up-selling only complicate the task of generating revenue. But for the e-commerce partner with dedicated merchandisers, these activities are second nature. They can maximize the potential of existing product lines and develop innovative, exciting products. An additional benefit is that the costs for such development are amortized over a larger number of units and can be used as part of a revenue-sharing agreement between the partners.

Product development, however, is only part of the value that the e-commerce partner brings to bear on the collaborative venture with a museum. Beyond the basics of merchandising is the process of data mining, an activity that yields important insights into member purchasing patterns and helps both partners to discern opportunities for future promotion and community building. Through data mining, museums can identify not simply the products but also the kinds of content that engages their members. Data mining helps museum fill in the broad strokes with nuanced information about their constituencyís needs and interests. Thanks to the speed and efficiency of their e-commerce partner, a museum can respond more quickly and accurately than ever before to those whom they serve.

Yet no matter how quickly technology allows museums to respond to their members, they face yet another challenge that can easilyóand, I believe, erroneouslyóbe dismissed as just a fact of museum life, which is that only a minute segment of the museum store market is able to achieve any scale economies. Here again is where an e-commerce partner can prove indispensable. The joint venture between a museum and online merchant can yield economies and additional customer service that are not otherwise possible, namely, through carefully trained telephone support, gift wrapping and shipping, receipt retention, and effective cross-selling and up-selling techniques. After all, the greater the volume, the better the buying and the more successful the selling opportunities.

As I mentioned earlier, one of the reasons that online shopping increases so dramatically every few months is the vast improvement weíve seen in product fulfillment and customer service. Thereís something about the "click" of the mouse that inspires in Web shoppers a greater demand for speed. The museums that make a graceful leap from brick-and-mortar retail to that of the Internet acknowledge this fact and respond accordingly. By partnering with an e-commerce company that has perfected the art of fulfillment and post-sale operations, a museum stands a far greater chance of not merely satisfying those demands but of building great consumer loyalty. Iíd like to note, I donít use that word "art" flippantly. Having an efficient fulfillment and customer service operation is equal parts inspiration and technique: an online retailer that processes orders quickly, anticipates customersí needs, lets them know when their orders have shipped, and provides knowledgeable, trained service personnel is at once as perfectly orchestrated as a Frank Lloyd Wright art glass window and as fully realized as a Vermeer face. Itís truly a sight to behold. The brilliance lies in the details: a system that automatically acknowledges individual orders down to the item level, automatic e-mail shipping notification with tracking information included, simplified and streamlined return process, and customer service anytime, day or night. For museums that want to flourish on the Web, the lesson is clear: they stand to benefit enormously from using an infrastructure thatís built and managed by a seasoned e-commerce partner. And by offering one-stop fulfillment, the e-commerce entity helps to reduce the museumís financial commitment to shop inventory even as it develops additional revenue streams. Once again, it makes sense to let each partner do what it does best.

In terms of marketing and advertising as well, partnerships make imminent sense. Vital to every museumís mission is the task of making its collection better known to the public. By partnering with a commercial entity, it can secure greater exposure for its unique products. As a number of online retailers already know, brand matters as much on the Web as in more traditional venues. Consumers respond very favorably to recognized brands, and museums that make branding one of their primary online initiatives will generate greater traffic and public awareness of their mission, holdings, events, and product line. Experienced in the lingo of Internet branding, an e-commerce entity can work closely with its museum partner to develop strategies for communicating brand and bringing its power to bear on all aspects of the museumís online retail activities.

Whatís more, content links generate increased traffic at levels that would be virtually impossible under any alternative, non-cyber arrangement. But content links arenít the only technique thatís proven to work online. EDMs, or electronic direct mailings, allow museums to communicate directly with their members at a fraction of the cost of traditional promotional pieces, catalogs, and gift shops flyers. People tend to visit brick-and-mortar shops when they attend an exhibition or other museum event, and some of them will undoubtedly browse the catalogs when they arrive in the mail. But through such Internet marketing methods as EDMs, a museumís full collection of products can be made available for all purchasing occasions online to millions of customers in an appealing, yet less costly, format. The more products that are offered, the more likely the site will become a favorite destination for museum patrons and gift-givers with refined tastes. Rather than being accessible to the customer only during hours of operation or when print mailings go out, museum take their place among membersí favorite online spots, the sites they bookmark for frequent visits.

At this point, some of you may be thinking, "Thatís all well and good. But arenít EDMs little more than junk e-mail? And by subjecting your members to such mailings, arenít you guilty of spamming?" For the record, spamming is no good. For some denizens of the Internet, itís a minor annoyance; for others itís a form of harassment. The kind of EDM campaign that I advocate is far different. Itís an outgrowth of the so-called "permission-based" model of marketing that begins with the premise that itís best to give members a chance to indicate what, if any, news about events, products, and promotions that they wish to receive andójust as importantlyóto provide them with the opportunity in each mailing to opt out of, or unscribe to, future announcements. Unlike spamming, which offers no freedom of choice and no protection from future invasions of privacy, permission-based EDM marketing hinges on members choosing to be in the loop, as it were, with their favorite museums. So rather than being subjected to promotional e-mails that arrive arbitrarily and clutter the userís in-box, members have a direct hand in determining whether or not they are contacted at all. But permission-based marketing is not simply a yes-no proposition.

Using the data mining resources available through an established e-commerce partner, museums can target their message, contacting segments of their memberships. Only those members who have indicated an interest in learning about special promotions of, say, statuary or apparel receive notices. At the same time, EDMs allow museums to target their dissemination of rich content. For example, by working with their online partner to identify members through data mining, museums can distribute a calendar of events for the next month, six months, or yearócomplete with multimedia features that enhance the "look and feel" of the site. Museums can also notify members in advance of an online article that spotlights a particular artist or exhibit if these members have indicated that they have an interest in learning more about certain subjects. In using an e-commerce partnerís resources to promote their mission, museums can create multi-faceted, visually appealing sites where members go and browse, much as they do in the brick-and-mortar spaces.

Believe me when I say, itís imperative that museums pay more than lip service to the concept of community building on their Web sites. If a museum seeks to maximize retail profits but ignores the issue of cultivating a sense of community on their site, they put their entire mission in peril. To neglect members is to risking alienating them, which can have devastating results for any Internet group, no matter what its mission. The ways in which a museum can achieve this goal are, however, not nearly as complex as you might think. An e-commerce partner can provide a museum with the necessary technological muscle to make use of such common-sense tools as e-mail lists, discussion groups, and other forms of targeted, instantaneous communication that have proven to be very effective methods of creating a Web community. Let me rephrase that: they are effective and essential. Indeed, building e-mail lists, discussion groups, and interest areas are no longer mere accessories on a flashy site but, rather, are a necessary component of the give-and-take between museums and their online constituencies. Targeted contact with members increase the so-called "stickiness" of the site, that is, the qualities that make it an appealing place to go and increase the length of the average visit.

Working in concert with an e-partner, museums can very effectively build and retain their membership bases, and they can do so without huge outlays of capital. All of this is not to say, however, that I recommend that museums abandon all traditional methods of member outreach; rather, I advocate taking something of a holistic approach by incorporating the core competencies of an e-commerce partner into an overall program that suits the mission of the individual museum.

As museums increase their Internet exposure and maximize their promotional opportunities through such community-building tools as EDMs and discussion groups, they see increased funds for product development, which brings my presentation full circle. Indeed, itís the shape that most accurately represents the nature of a partnership between a museum and an e-commerce group. Professional Web management, dedicated merchandising, expanded resources for product development, the reduction of shop inventory through one-stop fulfillment, trained telephone sales and customer service, permission-based marketing, and the use of community-building contentóthese arenít disparate services that have no real effect upon one another. Instead, theyíre pieces of the infinitely engaging puzzle of how to use the Internet to your advantage. And this puzzle is quite solvable. Through partnership with a well-conceived, smartly managed online company that has a proven infrastructure, the pieces fit together rather nicely to form a picture of forward-thinking groups working in concert.

As I see it, the real value of partnership between museums and e-commerce is more than mere strength in numbers. The best online partnerships are those that are ground-breaking, not simply for noveltyís sake, but because the medium itselfóthe Internetódemands it. And the power that comes from combining the expertise, resources, and vision of the respective members can be absolutely astonishing. To sell more is to sell out? Quite to the contrary. Letís not sell ourselves short. If the joint venture between Louis Tiffany and Thomas Edison were any indication of where art and technology can take us, weíd be fools not to accept the challenge.