Caro Consulting

Shop.org - Marketing for Pure-Plays: How to Drive Cost-Effective Traffic

My blog report on the Shop.org event would not be complete without a post on the session I moderated. Marketing for Pure-Plays: How to Drive Cost Effective Traffic. I was joined by two fabulous panelists: Gary Lindsey from eToys and Scott Savitz from Shoebuy.com.

By now, everyone knows the basics to driving cost effective traffic, so we wanted to mix in some not so commonly thought of ideas. We also challenged the attendees to add some of their own. Please feel free to submit your comments as well.

I kicked off the session by describing the Customer Experience Journey: Attract, Convert, Service, and Extend. In other words, to be successful the focus can't only be spent on driving traffic to the website. All companies, pure-play or multi-channel, B2B or B2C, must address the needs of their prospects and customers as they make the journey to an actual purchase.

In one of the other sessions, Travelocity spoke about how they follow their customers from the beginning to the end of their journey (this time literally). They attract someone to the Travelocity site through an ad about a great deal to Las Vegas. The conversion is not only a purchase of airline tickets, the customer rents a car, and reserves a hotel room as well. When she arrives to her destination she receives fabulous service. When she returns, Snapfish (a marketing partner) brings her back to the Travelocity site with an offer to post all of her photos and receive the first 10 prints free. At that time, she opts-in to the travel alert email and extends her relationship with Travelocity.

So what did we recommend?

Attract

You know about...

• Search Engine Optimization
• Pay Per Click
• Shopping Channels
• Affiliate Marketing

Have you thought about?

• Press Releases - Position your company as the industry pundit. Communicate frequently and be relevant. Results: a BIG interview (and your SEO guy will be happy with all the links).

• Marketing Partners - Visa, American Express, Bill Me Later. Potential marketing partners may be sitting next to you right now. Results: Increased traffic and sales.

Convert

You know about...

• Promotions
• Free Shipping

Have you thought about?

• Website Optimization - Low hanging fruit flourishes on your website. Use a good analytics tool for landing page and shopping cart testing and tuning, and internal search optimization. Results: Increase conversion rates overnight.

• Print Catalog - Drive offline consumers online to purchase. Segment the database and track by segment. Results: Order rates and order value increase.

Service

You know about...

• FAQs
• Contact Us Forms
• 800#s

Have you thought about?

• Survey Your Customer - Let your customers tell you how to market. Send our end of transaction surveys; create an area for product reviews. Results: Increased loyalty and repeat purchases.

• Research and Testing - Recruit from your own purchasers – give them a discount for their efforts. Communicate with them directly on an ongoing basis. Results: More cost-effective campaigns and less costly mistakes.

Extend

You know about...

• Email
• Direct Mail
• Cross Sell

Have you thought about?

• Personalization / Segmentation - Birthday specials, private sales, product alerts. Make customers feel special – surprise and delight them. Results: Increased open rate, increased conversion rate.

• Product Alerts - Out of stock items, seasonal items, collectibles. Encourage the visitor to opt-in to receive an email when the product comes available. Results: Target audience ready to buy when the product launches or is back in stock.

The audience mentioned several other ideas, one of which was sweepstakes. The panelists felt it was a good method to drive traffic, but unless it was an extremely relevant giveaway, the traffic did not stick.

What would you add to this list?

Harvey Seegers, President Home Depot Speaks at Shop.org FirstLook

When we last visited with Kathy Daly-Jennings at the AiMA event we learned more about the 10 Keys to Multichannel Success. Today, Home Depot is capitalizing on broadband users through the use of new, interactive technologies.

Working with Kaon to create three dimensional product demonstrations to enable customers to measure dimensions, zoom like they've never been able to zoom before, email a PDF with the same capabilities, and much more. This same capability will be used in stores or in a kiosks at the mall, enabling Home Depot to grow their inventory, without growing the space.

Learn online

• Video on demand – broadcast live narrow casts as well as building a library of video on demand

Virtual network of experts

• Ask a question and then use heuristics/artificial intelligence to determine where to route it in the library of responses. Virtual trouble shooting
• There will be a revenue model around this – either a subscription or a pay per question. Still testing this

Ability to allow customers to engage in remote diagnostics, remote control

• Change temperature, turn on/off lights

Going global

• Looking to support over 20 languages

People at my table felt they were throwing money away. Are they pushing the envelope or throwing money away? You make the call.

Shop.org Firstlook eHoliday Recap

Welcome to Atlanta Shop.org! As is typical with Shop.org, it has been a great event with world class speakers. They kicked off the event with the eHoliday Recap. The following is a quick summary, but nothing replaces the real thing. See you at FirstLook 2007.

Mood Study – Interesting Statistics

• 2/3 online shoppers are female (65% / 35%) - in fact women shoppers have grown 67% since 1998
• Connection speed has increased – 81% of consumers have high speed Internet access - which many retailers are starting to take advantage of with more advanced tools and technology
• 40% of consumers have been buying online for 5 years
• Over 8 out of 10 consumers shopped online at home during the holidays - There is still a Monday spike, but with increase in broadband at home means more buying at home, smoothing the numbers over time. Not to mention, no one wants to admit they shop at work
• Women are more likely to respond to surveys
• Broadband customers are more likely to contact customer service vs. dial up customers
• Largest revenue gains seen in 2005 are from 6 pm to 10 pm
• Top revenue days – Monday December 12^th
  • Amazon December 12^th was biggest day for them
  • QVC – traffic depended on multi-channel synergy – TV driving online
  • J.Jill – sales were based on when catalogs mailed

Prediction #1

Sales would grow 18-25%

Actual

30% increase (Nielsen/Net Ratings). It was a wildly promotional holiday season which posed a challenge.  J.Jill said gift cards were up this year. QVC said it was by far the best year ever with volume and new customers.

Funny comment of the morning was about gift card breakage - “I’d tell ya, but I’d have to kill ya.”

Prediction #2

Overall satisfaction will remain high

Actual

Consumer satisfaction hit record levels in 2005 – an 11% increase in customer satisfaction

Prediction #3

Free shipping will be more important this year than last year. 

Actual

Free shipping without conditions continues to be the most popular promotional offer for influencing consumers followed by free shipping with conditions

• Amazon – price, selection, and convenience. Covet free shipping. Great lever. Have been doing this for 10 years.
• QVC – quality, value, convenience. Free shopping all the time doesn’t make sense, because they are lowest price guaranteed… no sales. Instead chose free shipping upgrades
• J.Jill – Free shipping with conditions through email only (not site wide). Their challenge is the store – doesn’t resonate for those who want to shop in the store. Instead takes more of a multi-channel approach allowing the person to shop from catalog, store, or online store

Prediction #4

Margins will suffer due to higher shipping costs and downward price pressure.

Actual

Almost half of the merchants had increases in profit margins during the holiday season. Note: 40% said margins stayed the same

• QVC – better
• J.Jill – the same
• Amazon – would not say

Prediction #5

Retailers will break price early, but consumers will continue to wait until last minute

Actual

1/3 of consumers started their online shopping earlier than last year. 29% of retailers cut before Thanksgiving, 24% no mark downs (every day low value price), 26% 12/18-12/25

• J.Jill – Observed Thanksgiving as a much more promotional versus last year
• Nielsen – Very heavy promotional activity this year, because so much fear about gas prices and heating costs
• Shop.org – started in advance of Thanksgiving with email promotions. Used Wal-Mart as an example of starting late last year, but starting really, really early this year

Prediction #6

Real winners are those who optimized for organic search results instead of PPC (rising keyword costs)

Actual

Most successful programs in ascending order: Email to house list, SEM – paid, Affiliate programs, SEO was 4^th, but did go up 10%, comparison shopping was 5^th, but definitely grew

• J.Jill – majority of sales come from branded keywords. Natural search they are still looking for more benefit.
• Amazon – optimize both paid and organic. Greatly depend on partners to drive traffic
• QVC – user analytics tools to really understand what paying for. Now that the holidays have ended still spending as much, but really focus on ROI

Prediction #7

Pure online brands will hold their own

Actual

8-9 of the top 10 growing sites were multi-channel retailers. Multi-channel retailers were more optimistic than online-only retailers. Over three quarters of online only retailers reported growth of 30% or more.

Prediction #8

Christmas falling on Sunday will affect sales – the extra Saturday giving people time for last minute shopping

Actual

Retailers took full advantage of this – i.e. free shipping upgrades

• Amazon, J.Jill – moved their shipping days, which was a company expense, but benefited in additional sales
• Amazon – great growth in categories where men would buy last minute for women – i.e. brand name watches
• QVC – merchandising efforts targeted the typical last minute shoppers – i.e. jewelry

Predictions for 2006 Holidays

• Nielsen/NetRatings – Tighter integration with offline/online stores. Better product presentation. Take advantage of broadband to improve merchandising
• Shop.org – 23-26% growth and tighter integration
• JupiterResearch – Growth. Margins will continue to be squeezed. Continued reliance on search
• QVC – Specialty retailers with the largest growth. Big online brands because of the work they are doing right now to improve their conversion rates.
• J.Jill – Correlation with customer satisfaction with broadband connection means more unique applications can be created. Purchasing and in-store pick up will improve
• Amazon – Ways to make it easier to navigate while on Amazon. Make the search experience more relevant.

Where oh where did Caro go?

Over to Avenue A | Razorfish that's where.

Yes, it's true! I have left Caro Consulting to pursue an opportunity as senior strategy manager at Avenue A | Razorfish. Now, if you are like most, you are thinking to yourself: "Avenue who?"... "I remember Razorfish from way back." ... Or, in great disbelief, "There is an office in Atlanta?"

To set the record straight, yes, there is an office in Atlanta - it is downtown. Yes, Avenue A | Razorfish is one company - in July 2004, Avenue A and Razorfish joined to become one name and the largest interactive agency in the United States (source: AdAge 2005 Agency Report).

Which brings me to the next commonly asked question, "Why leave Caro Consulting?" Not an easy decision to make, but an easy question to answer. As senior strategy manager, I am doing what I love on a much grander scale, with one of the best in the industry. How could I pass up this opportunity? Want to join me? Shoot me an email.

Finally, "Will my blog and newsletter go away?" And pass up an opportunity to share exciting new trends or better ways to optimize the basics? No way! Yes, I have been remiss... Okay, a few months remiss. But, I promise to do better. I also promise to bring a different agency perspective.

Thanks continued support. Watch out for more coming soon!