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Ted Leonsis offers a compelling example of how the Internet has affected one specific business: “America Online carries two billion instant messages a day. How many long distance phone calls have those messages replaced?” And, by extension, how many dollars have long distance phone companies lost to the Internet?

This is but one example, but according to Leonsis, there are plenty of others, and there will be still more. The retailers and service providers that ignore this simple reality do so, he suggests, at their own risk.

There may be few people better able to gauge the impact of technology on the relationship between retailers and consumers than Ted Leonsis, the vice chairman of America Online. During his decade-long tenure with the company, he has helped position AOL has a multi-channel media company, and has specialized in defining and expanding the user experience for AOL’s some 33 million members. He also happens to be the majority owner of the Washington Capitals, and his efforts to employ interactive initiatives to help the team connect with its fan base reportedly has boosted both attendance and revenues (at least, before the NHL strike shut down the hockey season).

Leonsis will be one of the keynote speakers at next month’s FMI Marketechnics show, scheduled for February 13-16 in Washington, DC.

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To get a preview of his speech, MNB caught up with Leonsis a few days ago to chat about the Internet is changing and expanding the customer experience.

“What I would say is that the Internet is the great liberator of the consumer,” he said. “The consumer is more educated and more demanding. They are placing more demands on their suppliers, and the supplier has to get into lockstep with the shopper.”

And what does he think consumers are looking for? “Faster. Better. Cheaper. More convenient.” And that, he suggested, is what the Internet is primed to deliver.

“It’s not a black and white world,” Leonsis said, and “customers are going to move more comfortably between the two worlds” of the Internet and brick-and-mortar retailing.

“More and more consumers are going to be influenced” by online relationships, he suggested, saying that at the same time, consumers are going to be able to exert more influence. Ultimately, it is a more intimate relationship, though it is an intimacy that has to be nurtured by and be valuable to both sides.

While the expanding influence of the Internet empowers consumers and gives them the ability to be a lot more discerning in their choices, Leonsis said that the online environment also empowers retailers of various sizes and stripes. “While we’ll be in a world with more and more consolidation, because of online opportunities, smaller niche players can do well,” he said, because they are able to offer not just product but a wide range of information.

Leonsis spoke to the ways in which his Washington Capitals team has been able to user the Internet to build revenue. ”We have seats for games that are perishable. We’ll have a virtual sellout, but there will be maybe 180 single seats left. We’ll be able to sell maybe 100 of them” by posting the availability on the web, he said. The sale of these seats not only adds revenue to the bottom line, but also provides a service to fans – which builds loyalty in the long run. He said that food retailers ought to be use the same process to connect with consumers, offering specials, coupons, sampling and a wide range of other benefits that are customer-specific.

We asked Leonsis if a growth in Internet grocery shopping was inevitable, and he said he thought it was…though more likely as a component of the overall experience as opposed to being a replacement for more traditional shopping behaviors. But, he said, it is important not to underestimate the possibilities. “As an entrepreneur, I’ve found that things generally go slower than you think they will, but when you hit, they get bigger than you thought they would.”

Leonsis will speak at FMI’s Marketechnics on Sunday, February 13, from 10:30-11:30 a.m.
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