The e-retailer heads into the holiday shopping season behind a 30% increase in fulfillment spending and a widening net loss. North American sales increased ...
Santa’s lap used to be the place to reveal your gift requests-now it’s the Web. And if new online registries get what they want for Christmas, consumers will be zapping wish lists to friends and family for everything from birthdays to bar mitzvahs.
The near-instant success of wedding registries such as Dellajames.com (see Internet Retailer, September/October) has whetted the appetites of e-retailers for more gift business. That means expanding online gift registries beyond bridal and claiming a share of the estimated $130 billion all-occasion gift market. As e-marketers strive to stand out in an increasingly crowded gift registry market, they’re experimenting with models that bend the definition of gift registries, in some cases, into something entirely new.
NetGift Registry says it’s not a gift registry at all, but a distributed network of registries. So what’s the difference? “Consumers don’t come to us-we go to where they already are,” says Steven Furst, CEO of the Durham, N.C.-based company. NetGift offers shoppers millions of items through its presence on existing Web sites created for retail and other purposes. What retailers get is access to more customers, Furst says. Once a customer signs up and identifies a “gift circle” of friends, NetGift sends each of them an e-mail inviting them to create their own gift profiles.
The model taps into consumers’ powerful sense of affiliation with Web sites built around their pet interests. Visitors who log onto NetGift affiliate Socceronline.com to read the latest soccer news, for instance, can create a personal gift registry from a selection of retailers and distributors-and all without leaving the sponsoring site. NetGift’s “viral marketing” model has brought an average of five new visitors to the site for every new registrant since NetGift launched online in April, says Furst.
A retailer with an existing registry can acquire NetGift’s technology to boost its online exposure, participate in the distributed registry by putting its products in other network registries, or even choose an option that allows access to other network registries from its site.
The folks at Phoenix-based uGive.com aren’t convinced that consumers are ready to embrace gift registries other than for weddings. “For other occasions like Mother’s Day, users might think it’s strange to sign up for gifts,” says Roberto Guerrieri, co-founder and CEO at uGive, which launched in September. Still, giving the wrong thing isn’t much better than giving no gift at all. UGive’s answer: GiftFolio, a personalized electronic catalog of gifts that offers recipients a choice of presents. A gift search engine picks the portfolio from a database of 2,500 items from merchants and distributors, and pricing stays invisible to the recipient. Says Guerrieri, “It’s got the feel of a hand-selected gift and the flexibility of a gift certificate-without the tackiness of a visible price.”
Yet another new registry, WishClick of Foster City, Calif., launched in September as a gift and shopping source offering merchandise from retailers such as the Sharper Image, Pacific Sunwear, and Powell’s Books. All transactions occur through individual retailers. People who register can create highly personal wish lists that drill down to specifics like size, color and brand. Even Santa never had this much help: They can rank gifts by preference and occasion.
For retailers, an even bigger bonus is the potential of mining an extensive database built from the information supplied by shoppers and gift registrants.
Gift registries account for half of all wedding gifts purchased, but only 1% of gifts for other occasions. Making consumers comfortable with a new way of gift shopping could be as tough. But at the core, the formula for successful online registries isn’t much different from offline retailing. “Winners will help year-round gift-givers spend less time and money finding better presents,” says Seema Williams of Forrester Research, “and convert givers into ongoing customers.”